Australia Has Four Government Inquiries Into Franchising
Australian State Governments Now Investigating Predatory Franchise Practices AUSTRALIA (Blue MauMau) - Hot on the heels of the Australian federal government’s 2006/07 review of the disclosure provisions of the Franchising Code of Conduct, there are now to be reviews into franchising by the State governments of Western Australia and South Australia. At the federal level, the Productivity Commission is conducting two inquiries that touch on franchising issues too.
On 2 November 2007 Minister Margaret Quirk of the Western Australian Small Business announced the start of an inquiry into the operation of franchise businesses in Western Australia. The inquiry is about fairness in franchise arrangements and will be chaired by franchisee Chris Bothams, manager of the South East Metro Small Business Centre. He has a Master of Commerce (Business Administration) from Curtin University of Technology, having completed his thesis on Australia's Entrepreneurial Spirit: The Contribution of Franchising.
The inquiry invites written public submissions, with public hearings scheduled for metropolitan and regional areas over the coming months. The inquiry's terms of reference are to:
- review the adequacy of existing legislative provisions, both State and Federal;
- identify whether emerging trends in the franchising industry disclose patterns of unconscionable conduct that may not be covered under existing laws;
- examine whether existing remedies available to franchisees are adequate and, where appropriate, recommend changes;
- review existing practice in other jurisdictions, Australia and internationally, on unconscionable conduct and renewal of licences.
The inquiry is to report on March 31, 2008. (See link below.)
The Franchise Council of Australia has voiced its opposition, both to the inquiry and to the choice of chair, claiming that a franchisee is not capable of being impartial.
The South Australian inquiry will investigate the efficacy of current laws regulating the franchisee/franchisor relationship. The committee will focus on the laws that regulate the:
- disclosure of information to potential franchisees
- dispute resolution processes
- formalities required of a franchisor who wishes to conduct a franchise; and
- any other matter considered relevant by the commission.
Information about the S.A. inquiry can be obtained from Dr Paul Lobban at paul.lobban@parliament.sa.gov.au
Simultaneously, Australia’s federal Productivity Commission has been instructed by the Federal Treasurer to conduct 2 inquiries that partly overlap the State governments’ inquiries. These are the inquiries into Australia’s Consumer Policy Framework and the market for Retail Tenancy Leases in Australia. Both of the Productivity Commission’s inquiries have had their deadlines extended into early 2008 because of Australia’s federal election on 24 Novermber 2007.
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