Franchising Row Reaching Its Climax

TheAustralian:

The plot is thickening, and the drama deepening, for franchising in Australia. Franchisees are pleading for help, former employees are forecasting financial disaster for one operation and the federal Government’s small business minister is threatening to take action to kick the watchdog’s proverbial butt.

This is all surfacing as the federal Government studies more than 70 submissions to a review of the disclosures section of the Franchising Code of Conduct. Many argue that what is going on under the Code is simply not cricket. ‘Over the past few months, a number of concerns have been raised regarding the adequacy of the disclosures section of the Franchising Code,’ Small Business Minister Fran Bailey warned back in June. ‘Most people in the franchising sector do the right thing, but given the level of concern, I have decided to review the disclosures section of the Code.’

At the core of the complaints about franchising is the dispute-resolution system, in which franchisees hoping that the Australian Competition and Consumer Commission will eventually ride to their rescue, but the process takes an eternity and the results are rarely good news for franchisees.

Ms Bailey is not in the mood for consensus and she is not afraid to bounce the commission. ‘I have recently spoken to Graeme Matthews, who is undertaking the review of the disclosures section of the franchising code,’ she said. Here’s more.