Franchising Is Thriving, And Trying To Do Better

The Age.com.au:

Franchising in Australia is a $128 billion industry employing more than 600,000 workers, but it needs to become more transparent, a government review has found.

While the review found the Franchising Code of Conduct was operating effectively, it has made recommendations to ensure prospective franchisees have as much information as reasonably possible.

‘Franchising is an undoubted success story,’ Small Business Minister Fran Bailey said. ‘But despite its overall success, growing industry concerns on the disclosure of information led me to order the review.’

Under the recommendations, prospective franchisees will be able to contact past franchisees to ask about the franchisor.

‘These reforms are about empowering people to make the right business decisions,’ Ms Bailey said. ‘It will reduce the risks for franchisees by requiring greater disclosure, and will help build the long-term sustainability of the industry.’

The Franchise Council of Australia welcomed the findings in the review, and said it was ready to work with the Government to improve the industry.

Chief executive Richard Evans said it agreed in principle to the recommendations but remained concerned about further compliance costs.

‘The franchising code of conduct provides protection for the prospective franchisee,’ Mr Evans said. ‘Business failure can happen at any time for any reason but it can be mitigated with proper due diligence, which the code prescribes.’

See the other recommendations in the review agreed by the Government.