Franchise Code Revamped

The Australian:

THE behaviour of a small number of franchisors is unconscionable - and a big stick is needed.
This might happen in a perfect world, but we live in an imperfect, political world. But it seems help is at hand, and from a political source at that.

The federal Government seems to be riding to the rescue of franchisees. It has accepted most of the recommendations from its examination of how Australian franchising works.

Last year, Small Business and Tourism Minister Fran Bailey reacted to complaints from franchisees about some franchisors by establishing a review of the disclosure provisions of the franchising code of conduct.

Her decision was viewed with a degree of anxiety by the peak franchising body, the Franchise Council of Australia, which argued the code was working well.

“We believe an inquiry will provide little in the (way of) increased disclosure from franchisors,” Franchise Council of Australia chief executive Richard Evans said when the review was established.

“But what we do anticipate will be recommended is that franchisees will be required to provide full disclosure and be required to seek mandatory legal and accounting advice before entering into an agreement.”

In September, the review was greeted with relief by many embattled franchisees, who were not only lamenting their treatment by some franchisors, but also the lack of help from the industry’s government watchdog, the Australian Competition and Consumer Commission.

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