Australian Government Fails Franchising
CANBERRA, Australia - Small Business Minister Craig Emerson has tabled his response to the Australian Franchising inquiry. His response lacks leadership on this issue and plays into the hands of rogue franchisors by allowing them to continue to get away with dishonest and unethical behaviour that is just not accepted in other areas of business.
Minister Emerson has failed the franchising sector. Again.
The problems within the sector have been clearly identified; the result of three separate inquiries. The recommendations that were tabled by the Parliamentary Committee last year had full bi-partisan political support and should have been implemented in full. Instead he has chosen to skirt around the edges, establish yet another inquiry, and fail all Australian franchise participants.
The Minister has failed to implement the two key recommendations; that of good faith and pecuniary penalties for breaches of the Franchise Code of Conduct. His response? Establish yet another inquiry.
Why can everyone else see that Good Faith is integral to Good Franchising? By failing to understand this basic connection, Minister Emerson continues to show no understanding of the franchising sector. It is as simple as Associate Professor Frank Zumbo writes: “All that Minister Emerson needed to do is to amend the Franchising Code to say that "the common law requirement of good faith applies in relation to franchising agreements covered by the Code". Simple.
Minister Emerson will instead submit us to yet another Inquiry, an “expert panel to inquire into and report on the need to introduce into the Franchising Code any further provisions to prevent specific behaviours that are inappropriate in a franchising arrangement.” The panel is to report by the end of January 2010. So we wait.
Another inquiry is a waste of time and yet another delay; the result of which is that franchisees will continue to suffer at the hands of rogue franchisors. The problems have been identified repeatedly in this sector; they do not need to be re-hashed again. The sector needs action. Consider the money being wasted on these continual ‘inquiries’. That could have been put to better use – perhaps by providing funding to get some of these franchisee cases to court.
The Minister has failed to send a message that non-compliance with the Code and unethical behaviour will not be tolerated within the franchising sector.
He has failed to implement penalties for the Franchising Code, instead flicked the issue to an inquiry. He has failed to address the problems within the ACCC; giving them powers to “conduct random audits” does not address the fact that it is the ACCC’s failure to use their existing powers that is the main issue. He has failed to address the issues of the termination of franchise contracts and franchisor insolvency. His approach “to provide clarity on the “end of term” is positive, but falls far short of what is needed.
Minister Emerson has shown he lacks the leadership and courage to tackle this issue. He needs to stand aside and let someone else take on the job.
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surely any person with a logical mind can see that if they do not do something about rogue franchisors our country could well fall into an economic heap. It seems so logical to me.
When I sell a business a person buys it in good faith that they will be shown the system and if they follow it they will succeed. Like when you buy a car in good faith that as long as you follow the basic system of car care it will run.
We are an aging population, the government then extends retirement age, many people have physcially demanding jobs and can not work that long. I sure as hell wouldnt my dad at 67 repointing my roof. So what are these people to do, they faced with predjudices of being too old to retrain, to old to pay when you can get a junior for less etc etc etc. so they take their retirement fund and hand it over to some fat cat franchisor. They then provide no support, accuse the franchisee of being stupid and thats why it failed. they can buy it back for nothing and resell to some other sucker and the cycle continues. With the rising retirement age and the rise in franchises the issues really need to be addressed.
My question is: who is going to paying for these people to live when they loose thousands and collectively billions into franchisors whom are only out to spin a quick buck. all the while making it hard for the honest franchisor who really wants to help people secure their lively hood while building a secure life for themselves.
Money talks and cow poo walks, if the franchisor knew that there was a process and it was to be swift and would hurt their back pocket, I think you would suddenly find alot more compliant franchisors who are supporting their fracnhisees in a way that was sold to them and in good faith they bought it, worked it and becasue of the franchsior being allowed to churn they still failed.
its is logical, any parent can see it the punishment must fit the crime, rogues are stealing money and lives and there is no punishment, if your child kept stealing his mates lunches they would be punished or else they would continue their bad behaviour..
If there is no punishment for stealing peoples investments then why bother doing anything right. In fact why would you employ any one when you can franchise, slap people with a restraint of trade and gag order and then churn them out and start again
what a money spinner, while the government sits on its well padded rump and wastes more time and money on inquiries they make useless because they ignore the informations ,more rogues are learning the best thing to do is just get into the business of selling franchises, not building franchises.
One rogue cheerfully tells the media about the 100 plus sold in the last 12months thats over $6,500,000 taken from people in a company that has a very low success rate.
Good on ya Emerson, are you going to sacrifice most of your pension to feed the homeless that this lack of action will create.
But that will just be for effect to suggest Emerson has achieved something.
There are a few good changes in his decision thus far. But ultimatley we all know that there is nothing here that will effectively clean up the industry and there is nothing seriously being contemplated. Rogue franchisors will simply tidy up their processes to accomodate change knowing that they can continue to churn and burn and under-funded franchisees will have no redress.
Without a Tribunal there will be no change to a filthy industry. I have looked at the arguements and I disagree with calls for an Ombudsman. That process would create more cost and it would simply take too long. The majority of franchisees in trouble don't have the money or the time and franchisors, FCA and Emerson know it. Franchising needs a flaming Tribunal and then you have a serious flaming deterrent.
I will be on Brisbane radio next week asking the voters in Emeron's electorate of Rankin to throw him out. And I ask Australian franchisees to support every effort of those within that electorate that work to throw the gutless bastard out.
The more things change; the more they stay the same.
Seems rather to me that your problem is your country if filled with a bunch of socialist who don't want to acknowledge that they need to take responsibility for their own lives. What is this nonsense, people did not know they were getting old and their physicality would decline and they would either need substantial savings to draw on or move into a business that did not require the physical labor? What franchising was supposed to be the answer where what the elderly big wig franchisee sits like an over lord over his minions laboring beneath his heel so he could retire in dignity?
Sounds to me like your concern about having to pay for all the broke people is simply the same story viewed at a different perspective. Sounds to me that the issue is people think they are owed something, whether it be an livelihood they purchase from a fFranchisor or subsidy when they are sick or poor.
And maybe that is the Australian way, I don't know, don't care to know if this bleating sheep post is indicative about how your countrymen actually think.
Sheep are made to be sheared and their ranks thinned by wolves. You want to protect your self form a wolves hire a Shepard. You didn't hire a Shepard and Government worldwide is proven to be corrupt and self serving. the Government will pretend to be a Shepard while shearing the sheep at the same time under the guise of protecting you.
Now back to your bleating...
As an irresponsible, socialist, aussie ovine I'd like to ask guest if he knows anything about Australia's current economy or fiduciary policy? Is he/she aware that the way my fellow "countrymen actually think" has seen our economy avoid a recession, our banks keep their credit ratings and our dollar rise to a thirty year high against the $US?
I do like it when people jump to stereotypes and cliches when making sweeping statements about another country in response to one individual's comments..... It makes it easy for me to convince foreigners that I ride a kangaroo to work.
Uppity comments coming from someone who lives in a bloody penal colony - really!
Actually I based my comments in part on the drivel folks like you continually post here - seriously.
I don't really care about your country and I have nothing against roos,, I just get sick of all the whining and complaining that goes on. I thought Aussies were tougher than that, due to your penal colony roots, but I guess the guts got breed out at some point. Really a shame. Now you can join the U.S. as a country of whiners. Welcome.
(tututututut)
"What's that skippy?"
(tututututut)
"You think people who whine that other people whine too much have a circular argument? I think you might be right there skip. What shall we do about it?"
(tutututut)
"Introduce them to some Drop Bear mates of yours? I think you might be right skip."
(tututut)
You are right. I won't whine any more about the peopele who whine. How do you say it? "Gaday"!
that idiot just achieved his goal and this thread has wandered. That is all he has. Ignore ....
The more things change; the more they stay the same.
believing you have a valid point. I havnen't had a chance to read every single post or blog yet (by your statement you must have huh) , but it seems very apparent complaining is not confined to one country. maybe you should just stop reading it if it makes you want to lower yourself to simply slagging off a country and ranting about stuff you clearly dont know about and by your own admission dont care to know about..
Your posts have had nothing to due with the law and the law makers here, This particular thread revolves around the fact that we have laws in place and regulators that do not enforce these laws, that are already in place. so the governement adds more to list for the regulators to ignore and the rogue zors take full advantage of.the lack of action of enforcing these laws. And to top it off they are leaving the terms of the law set out in such a way they are not clearly defined and therefore there is no tangible cause of a action for regulator to take. If the regulator is unable to clearly establish a case using the definaitions what hope does a zee have that has been burned and churned out of the business.
what the australian laws are doing, you and your bleating and carrying on about our country folk wtf. Dr Emerson is a numbers man. Thats all he seems to give a s####t about.. The governement have things in place to deals with aholes, but they dont enforce it and again that has to do with funding and numbers, people have planned retirement and put their pensions into super funds that they can not access until the governemnt says so. they gvernement is making that age older and older, a redundancy payout or the equity in their home is what they have to live on between when they were allowed to get their pensions and where they are now. You may not undertsand what the concerns are, but we in oz can see what is happeneing espcially when you know the dramtic rise in franchising and how many they predict will be supposedly employed by franchised bsuiness over the next 20 yrs. I would like to see what you base your drivel on, other than your own personal opinion and repulsion to some of the responses.
I agree Yes the fracnhisee needs to take repsonsibilty, BUT equally so the fracnhisor needs to be held responsible for their actions and failures, instead of hiding them and relying on a underfunded franchisee and government to ignore it. While our governemnt shows it lack of action they will continue to bleed us dry. Again making it hard for the honest franchisors.
Our governemt are running campaigns to stop people from absuing themselves becasue they understand the future ecomic cost. yet they allow fracnhsiors with a track record of failure to take money and leave a burden on the system. Its not just the living costs, it is the stress related diseases that is going to burden our national health system as well. so for every 10k they save by ignoreing problems it could go into 100s of thousands dealing with the impact.
The issue here is not the systems that are supportive and honest, the issue is the systems that are scams. I have been involved in 3 franchise systems. 2 of which were brilliant and worked with franchisees to build and grow to success. these are not the problem, yes they have failures but they do their best not to, Then the 3rd one well that is the eye opener. this one is the one that sterotypes bad and abusive use of power and business practices, down to having leads for work being diverted to the franchisors mate while evryone else is suffering, the mate is doing really well. How does a franchisee take responsibilty for that failure, especially when they dont realize it is happeneing until people they know try to get back in touch with them through the head office and find that their business is taken on by someone else.
Futhermore if you dont care, and you just want to speak about australians like they are all d####hds then why spout crap about how australians think, and b###sht about lording over minions, is that what you really think being in business is all about, especially being in a franchise, bhuahahaha. you are funny, most people that buy a fracnhise only buy a job, however they think that the job is secure and in many cases it is. I suppose if they were to think like you that they will be "lording over their minions" then I can see a faliure as imminent. it would be the epitome of not doing any due dligence at all if they really thought that would be the case and their failure would be entirly on thier shoulders, if they were to be so stupid as to think that is what business is about. Buisness is hard work no matter what system you are in.
Our governemt are running campaigns to stop people from absuing themselves
Richard, don't go to oz. Your technique for staving off prostate troubles is being actively campaigned against by the wizards of Oz.
when it comes to australian franchising, you really dont have anything useful to say do you.
its bout time youse loined to handle yo own crapola and quit whinin all da tyme. Git a sheperd is da rite ting to do, youse!
All us real kapitalis unnerstan da free mahkit shit dat youse don know nuttin about.
If youse didn loose yo mony on a franchise youse woulda jist drunk it up or loss it on da horses anyhow or maybe sucked it up yo nose.
Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
While people scream about inept government and scum franchising they warn people to be more than careful. All this siht is about free market dollars as an excuse to allow little folk to be buggered. Apparently the more people that get buggered the better it is for the economy and employment stats.
In de ole days when someone ripped someone off da chances was dey gunna have em an accident. We sopissticated now and so we bash em wit words. I miss the ole days.
Now we gunna have to pick em off one at a time. More time and more buggering is not efficient.
The more things change; the more they stay the same.
In de ole days when someone ripped someone off da chances was dey gunna have em an accident... I miss the ole days.
And the above would solve the problem would it not? Instead we get bleat, bleat, bleat...
Bleating is not restricted to this country my friend.
The more things change; the more they stay the same.
reason for God to have created sheep is so that they can be sheared and devoured. When people behave like sheep - through ignorance or otherwise - they suffer the same fate.
I agree with Da Guest that yelling about bad government is useless - and I have been saying that for many years also.
Since we know that government isn't going to change, and the sheep will never be able to defend themselves, the sheep have to be educated to the hiring of their own predators to deal with the wolves. That's where people like me make our living.
Now if the sheep don't want to hire us predators, whose problem is that?
In truth there is another reason for sheep - which explains why everyone in the Middle East is so damn ugly.
Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
My point exactly! Someone finally gets it.