Franchising Code Flawed: Experts

Sydney Morning Herald:

Some of the new changes in the Franchise Code may be difficult to implement and lead to higher costs, say franchise law specialists representing some of the leading retail brand franchises.

There’s not only greater capacity for problems but more work to be done by both franchisors and franchisees.

Mandatory inclusion of commencement dates on contracts before signing may be difficult to implement in practice and leave franchisors liable for the initial upfront investments in fit-out and leasing deals, according to Michael Smith, whose legal firm, Smith Law, represents a number of well known retail and hospitality brands.

”I’m concerned laws are being passed, which are difficult to implement in practice,” Mr Smith said.

”The Code says that a franchisee cannot be bound by a franchise agreement until the disclosure documentation, which includes this agreement, has been completed in all respects (including the commencement date). Read more.