Insight

Fairness in Franchising

The operation and effectiveness of the Franchising Code of Conduct wrap up

A year ago, the Senate referred an enquiry into the operation and effectiveness of the Franchising Code of Conduct to the Parliamentary Joint Committee on Corporations and Financial Services. The Committee’s final report has now been released, offering 70 recommendations. To put this into perspective the Banking Royal Commission came up with 76 recommendations.

One of the key outcomes of the Report is the creation of a Franchising Taskforce to examine the feasibility and implementation of a number of these recommendations.

The Committee also proposes the Australian Competition and Consumer Commission be given more responsibilities and greater power to investigate misconduct and exploitive behaviour in the franchising sector.

To understand the implications of the changes ahead, read our top 10 considerations right now.

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Other key takeaways from the report were:

  • There will be legislative change
    • This will require changes to your disclosure agreements and franchise contracts
    • This will mean training for staff, executives and board members
  • Your franchisees will have more rights
  • Disciplinary action will be stronger and swifter
  • There will be changes in the approach of the regulators

These recommendations clearly address the imbalance between the Franchisors rights with Franchisees rights.

To access the report on the operation and effectiveness of the Franchising Code of Conduct, please click here.

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