LONG-AWAITED reforms to the franchising code have received an overall thumbs-up from industry watchers, although some think the changes might cut the number of franchisors or increase paperwork burdens.
The Government’s decision on the reforms, announced last week, also included axing certain recommendations such as a risk statement for potential franchisees – this may have made them “better informed” before deciding to enter an agreement.
The office of federal Small Business Minister Fran Bailey said the code’s review affecting the $130 billion industry came after “growing industry concerns on the disclosure of information”.
Her office highlighted changes including providing franchisees (those people who run the stores) with audit reports of how marketing funds are spent in a sector ranging from donut shops to electrical goods retailers.
Franchisors (those overseeing the chain) will also have to report any material change to circumstances within 14 days, compared to the existing 60.
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