Franchise Agreement in New Zealand: Template, Key Clauses and Local Law (2026)

A franchise agreement in New Zealand lets a franchisor license its brand, system, and know-how to a franchisee who runs the business under that brand for fees. New Zealand has no franchise-specific legislation and no mandatory disclosure law. The sector largely regulates itself through the Franchise Association of New Zealand (FANZ), and franchising otherwise relies on general trading, competition, and contract statutes. This guide explains what applies, lists the clauses a New Zealand franchise agreement should contain, and gives a skeleton you can adapt. It is general information, not legal advice. Confirm the current position with a qualified New Zealand lawyer before you sign. ## The law that governs franchising in New Zealand There is no Franchising Act. A franchise is built from general laws plus a voluntary industry code: - Fair Trading Act 1986. Prohibits misleading and deceptive conduct. This is the main legal control on franchise sales and disclosure, since there is no statutory disclosure regime. Overstated earnings claims or hidden terms can breach the Act.

• Commerce Act 1986. Governs anti-competitive conduct, which affects exclusive territories, supply tie-ins, and resale conditions.
• Contract and Commercial Law Act 2017. Consolidates general contract law that governs the agreement.
• Franchise Association of New Zealand (FANZ) Code of Practice and Ethics. FANZ, formed in 1996, runs a voluntary self-regulation code. FANZ merged its separate Code of Practice and Code of Ethics into one document that took effect on 1 December 2024, with members expected to update their agreements and disclosure documents to match by 1 April 2025. Membership is voluntary: a franchisor does not have to join FANZ to franchise in New Zealand, but members must follow the code. Reported code features include a disclosure document given to prospects before signing, a cooling-off period for the franchisee, a requirement that the franchisee take independent advice, and a dispute-resolution process. Because membership is voluntary, check whether the franchisor is a FANZ member and whether the code applies. ## Key clauses in a New Zealand franchise agreement ### 1. Parties and recitals Name the franchisor and franchisee in full and state the brand and system licensed. ### 2. Grant of franchise and territory Define the rights granted, the location or territory, and whether it is exclusive. ### 3. Term and renewal Set the initial term, renewal rights and conditions, and renewal fees. ### 4. Fees Cover the initial franchise fee, ongoing royalties, marketing fund contributions, and technology fees, with GST treatment and payment timing. ### 5. Disclosure and independent advice Reflect the FANZ expectations where they apply: a disclosure document before signing, a cooling-off right, and confirmation the franchisee has taken independent legal and financial advice. ### 6. Intellectual property and the system License the trademarks, trade dress, operations manual, and know-how for use only within the franchise, with ownership and goodwill staying with the franchisor. ### 7. Operating standards and the manual Require the franchisee to follow the operations manual and brand standards and to accept inspections. ### 8. Training and support Set out initial and ongoing training and launch support. ### 9. Supply and purchasing State supply obligations, keeping Commerce Act limits on anti-competitive tie-ins in mind. ### 10. Marketing and advertising Cover national and local marketing, the marketing fund, and approval of franchisee advertising, with claims that comply with the Fair Trading Act 1986. ### 11. Confidentiality and restraint of trade Protect the system during and after the term, with restraints limited to what a New Zealand court will treat as reasonable. ### 12. Privacy If the franchisee handles customer personal information, add Privacy Act 2020 obligations. ### 13. Transfer and change of control Set the conditions and fees for a franchisee transfer. ### 14. Termination and post-termination Set grounds, cure periods, and what happens afterwards: stop using the brand, return the manual, and deal with stock. ### 15. Dispute resolution and governing law Include mediation or the FANZ process first where it applies, then choose New Zealand law and a forum. ## A simple clause skeleton 1. Parties and recitals

2. Definitions
3. Grant and territory
4. Term and renewal
5. Fees and payment
6. Disclosure and independent advice
7. Intellectual property
8. Operating standards and manual
9. Training and support
10. Supply and purchasing
11. Marketing
12. Confidentiality and restraint of trade
13. Privacy
14. Transfer and change of control
15. Termination and consequences
16. Dispute resolution and governing law
17. General provisions ## One workspace to draft, review and track the franchise A franchise program is a master agreement plus many franchisee agreements, each with its own renewal dates, fee schedules, disclosure documents, and local changes. Keeping the current version, tracking renewals, and applying a system-wide change cleanly across every agreement is where franchisors lose control when the files sit across inboxes and folders. Adira is an AI legal operating system that keeps drafting, review, clause-level editing, version history, and key-date tracking in one workspace, so the master franchise agreement and each outlet's version stay connected and current. Indian corporate law is deepest today, and wider non-India jurisdiction depth, including New Zealand, is on the roadmap, so treat this page as general guidance and verify New Zealand specifics locally. You can see the product at Adira. ## Frequently asked questions