Franchise Dispute With Your Franchisor? The Notice of Dispute That Starts the Clock (and What the Sharetea Penalty Means for You)

On 2 November 2026 the ACCC announced that bubble tea franchisor Sharetea Australia had paid $39,600 in penalties under two infringement notices. The ACCC alleged its franchise agreements made franchisees pay the costs Sharetea incurred when it settled disputes with them. If you are a franchisee in a dispute with your franchisor right now, that is worth knowing, because the Franchising Code says your dispute starts in one specific way: a written notice of dispute. Until you give one, the Code’s process has not begun.

Claim Done drafts that notice from your answers. It sets out the three things the Code requires, invites a meeting and states the date the 21 days run out. You approve it before anything goes out. See the Franchise Notice of Dispute service or start at claimdone.com.au/begin.

What the Sharetea penalty actually covered

Read the ACCC’s release closely and it is a dispute-costs story first. The infringement notices were about agreements that required franchisees to pay Sharetea’s costs of settling disputes with them. After talking to the ACCC, Sharetea also agreed to change other terms the regulator was concerned about: money it could keep if a franchisee left in the 14-day cooling-off period, long post-term restraints over wide areas, and high interest on overdue franchise fees.

Two points matter for anyone in a live dispute.

First, the ACCC’s own guidance on resolving franchising disputes says franchisors can’t ask franchisees to pay the franchisor’s legal costs of settling a dispute, and can’t put a term about who pays those costs in the franchise agreement. If your agreement has a clause like that, it does not mean you are stuck with their legal bill.

Second, paying an infringement notice is not a finding that the law was broken. The ACCC says so in the same release. Sharetea had 124 franchised businesses as of November 2025, so this is a mid-sized system, not a fringe operator. The lesson is not about one brand. Check your own agreement’s dispute clause before the first meeting.

The notice of dispute: three things it must say

Both the ACCC and the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) describe the same first step. Either side, franchisee or franchisor, writes to the other setting out:

• the nature of the dispute
• the outcome you want
• what action you think will resolve it.

That is all the Code asks for. It is also where most people go wrong, because a phone call to the franchise manager, a heated text or a comment at a regional meeting does none of it. A notice has to be in writing and has to cover all three points.

Be concrete. “The marketing levy is unfair” is a complaint. “The marketing levy rose from the amount in my disclosure document in July, I have not received the fund report I asked for on 4 August, I want the report and a pause on the increase until we meet, and a meeting within 14 days would resolve it” is a notice. Name the clauses if you know them. If you don’t, describe the subject (the marketing fund provisions, the territory clause) without guessing at numbers.

Keep the tone flat. A notice that threatens court or the media usually makes the franchisor dig in, and it adds nothing the Code needs.

The 21 days, and what happens when they run out

Once the notice is given, both of you are expected to try to agree how to resolve it. The ACCC puts the window at 21 days. If you can’t agree on an outcome inside that time, either party can refer the matter to alternative dispute resolution (ADR), which under the Code means mediation or conciliation.

You have a choice of route. The Code has its own process, and every franchise agreement must contain a dispute procedure that meets the Code’s minimum standards. Either party can pick which one to use. ASBFEO notes that where the agreement’s internal process falls short of the Code’s minimum, the Code’s procedure applies.

If you can’t agree on who the mediator or conciliator should be, either party can ask ASBFEO to appoint one, and ASBFEO says that appointment is made within 14 days of receiving the request. From then on the practitioner runs the process independently.

Once ADR has been requested, attendance is not optional. ASBFEO is blunt about it: both parties must attend and genuinely try to resolve the dispute in good faith. The ADR practitioner reports back to ASBFEO on whether the process happened, whether the parties acted in good faith and whether it settled. The ACCC adds that ASBFEO can name franchisors who have not participated meaningfully.

Put those numbers together. Give the notice today, and the earliest you can refer to mediation is 21 days later. If you then have to ask ASBFEO to appoint someone, add up to 14 more days. So the paper you send this week decides whether you are in front of a mediator in roughly five weeks or still trading emails at Christmas.

What mediation costs, and who pays

The Code’s starting rule, as the ACCC puts it, is that each side pays about half the cost of the process unless you agree otherwise, and each side pays its own costs of attending. ASBFEO gives a real figure: on average, mediation costs around $4,000, or $2,000 per party for a two-party dispute, though it says this can vary widely. Room hire, travel and expert reports can be charged on top.

There is a cheaper door. ASBFEO may offer subsidised ADR for a half or full day where it is case-managing a dispute under an industry code such as the Franchising Code. Each party pays a co-payment of $250 to $500 and ASBFEO covers the rest. Access is not automatic: ASBFEO weighs the amount in dispute, earlier attempts to resolve it and whether both sides are willing to take part.

Here is the comparison worth making. At the $2,000 average half-share, a $500 co-payment is a quarter of the cost; at $250 it is an eighth. One of the things ASBFEO looks at is what you have already tried. A dated, specific written notice and a record of the 21 days is the clearest evidence you can give that you tried properly before asking for help.

One more cost rule from the ACCC: a franchisor can’t make you resolve the dispute outside the state or territory where your business is based, or outside Australia.

Disputes that come up most, and how to frame each one

The ACCC’s guidance on the Franchising Code notes that a new Code started on 1 April 2025, with some rules applying from 1 November 2025. The changes cover significant capital expenditure disclosure, specific purpose funds such as marketing funds, a reasonable opportunity to make a return on investment, compensation for early termination and restraint of trade clauses. Those are also where the arguments tend to land.

Marketing fund. Ask for what the agreement and disclosure document say you are entitled to see, and say what you want done with the money or the increase. The outcome is usually information plus a decision, not a refund on day one.

Fee or supplier changes mid-term. The ACCC’s own guidance accepts that a franchisor can make some decisions without consulting you if it acts in good faith. Your notice should focus on what changed, when, what the agreement says, and why you dispute it.

Territory. Map it. Give addresses and dates of the encroaching store or online sales, and say what outcome you want: compensation, a boundary fix, or a commitment going forward.

Renewal or exit. If you want out early, ASBFEO describes a written early-termination proposal the franchisee can give, and the franchisor must give a substantive written response with reasons within 28 days. If it refuses, the matter can move into the dispute process.

Working in a system where other franchisees have the same problem? The ACCC says franchisees can discuss their disputes with each other despite confidentiality clauses where the agreement was entered into, extended or renewed from 1 July 2021, and a group can use a single mediation. One notice from each franchisee, with consistent facts, keeps that option open.

Which Code applies to your agreement

The ACCC’s page on when the Code applies says the new protections apply to franchise agreements entered into, extended, renewed or transferred from 1 April 2025. An older agreement that has not been renewed, extended or transferred since generally sits under the 2014 Code. The dispute steps are the same in substance, but citing the wrong version makes a notice look careless. Check the date on the front page of your agreement, and the date of any renewal, before you write.

If you are still deciding whether to sign or renew, our guide to franchise agreement review covers the disclosure document and the cooling-off period. That is a better place to catch a dispute-costs clause than the week you need to use it.

What Claim Done does about this

Claim Done’s Franchise Notice of Dispute is built for exactly this step, for franchisees and franchisors. You answer plain questions: which side you are on, when the agreement was signed or last renewed, the clauses involved, the amount at stake, the outcome you want and what has already been tried. The document engine then drafts:

• a notice of dispute that sets out the nature of the dispute, the outcome you want and the action you think will resolve it, citing the right version of the Code
• an invitation to meet and the date the 21 days end
• a step-by-step guide to the Code process, including asking ASBFEO to appoint a mediator and what attendance and costs involve.

It takes about five minutes. You read and approve the notice before anything happens. Once you approve it, it is emailed to the other party’s address if you give one, or you send it yourself. Claim Done never lodges anything on your behalf. The price is a flat fee shown on the pricing page, with no subscription and no hourly billing. If the dispute settles, a Deed of Settlement puts the deal in writing.

Claim Done is not a law firm. The notice records your facts and your position; it does not decide who is right, and neither does the Code.

Your next step

If the dispute is real, the cheapest thing you can do this week is start the clock properly. Start your Franchise Notice of Dispute on Claim Done, answer the questions, review the draft, and approve it. The 21 days start when the notice is given, and nothing in the Code moves until then. For ASBFEO help with mediation, its information line is 1300 650 460.

Frequently asked questions

Do I have to send a notice of dispute before going to mediation under the Franchising Code?

Yes. The ACCC and ASBFEO both describe the written notice as the first step. It must set out the nature of the dispute, the outcome you want and what action you think will resolve it. If you can't agree within 21 days, either party can refer the matter to mediation or conciliation.

Can my franchisor make me pay its legal costs of a dispute?

The ACCC's guidance says franchisors can't ask franchisees to pay the franchisor's legal costs of settling a dispute, and can't include a term about who pays those costs in the franchise agreement. Sharetea paid $39,600 in penalties in November 2026 over agreements the ACCC alleged required exactly that.

How much does franchise mediation cost?

ASBFEO says mediation costs around $4,000 on average, about $2,000 per party for two parties, though it varies widely. The parties share the practitioner's cost unless they agree otherwise. ASBFEO may offer a subsidised half or full day with a co-payment of $250 to $500 per party, depending on the circumstances.

What if the franchisor won't agree on a mediator?

Either party can ask the Australian Small Business and Family Enterprise Ombudsman to appoint an ADR practitioner. ASBFEO says the appointment is made within 14 days of receiving the request. Once ADR is requested, both parties must attend and try to resolve the dispute in good faith.

Can a franchisor send a notice of dispute to a franchisee?

Yes. The Code's dispute process works in both directions, so a franchisor can give a franchisee a notice of dispute in the same form. Claim Done's Franchise Notice of Dispute asks which side you are on and drafts the notice accordingly.