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Log In / Register | Apr 17, 2014

Australia’s Largest Franchisor Says Its Time

As the South Australian Parliament gears up to be the first Australian State to establish effective franchising legislation, Jim Penman, the franchisor to 27 brands, has called for reputable franchisors to
join "on the side of the angels."

Mr Penman of Jim’s Franchising, described the Franchise Council of Australia’s opposition to the Bernie Ripoll chaired Franchising Inquiry recommendations as ‘total garbage’.

He wanted franchisee advocates and major franchisors to jointly push for reforms, including affordable dispute resolution for franchisees, defined penalties for breaches of the code, an independent body which could hold information on franchises, and automatic right-of-renewal when franchise agreements expired. - WAtoday.com.au, Chalpat Sonti

A spokesperson for the Federal Minister, Craig Emerson, said he would not be rushed although in understatement thought:

it's taking a bit longer than we anticipated …. We've got a lot of detailed submissions to go through and it's really important we get this right.

Australian franchisees suggest that such a non-response from the Minister after almost a year since recommendations were tabled was to be expected.

Is he telling us they are still at the stage of reading submissions?  That proves Emerson has no idea of the damage that is being perpetrated daily’

South Australian MP, Tony Piccolo, has publicly stated his frustration with delays to franchising reform suggesting that once his State enacted franchising laws he expected other States would follow.  Politicians at both State and Federal levels receive a constant  flow of complaints from franchisees with common threads of abused power, misrepresentation, detrimental revenue streaming, forced bankruptcy and fraud.  

Queensland MP David Gibson has previously called on that government to enact franchisee protection should the federal Minister continue to fumble.

Generally speaking, Australians are going to like the idea of protecting the weak against the strong. It's time some of the strong in our industry say this won't hurt our industry but will help it. – JP

Associate professor of business law at the University of NSW, Frank Zumbo, demanded that Dr Emerson show leadership amidst broad bipartisan political support for franchising reform.

(Dr) Emerson's failure to implement the recommendations is creating a policy vacuum and Mr Piccolo's motion makes it clear that the policy vacuum at a Federal level could easily be filled by state legislation- Frank Zumbo

Another major franchisor suggested he would consider the impact of franchisors joining together to protect everyone in the industry and agreed there needed to be a shakeup.  Another suggested that the more sophisticated franchisors were tending to steer away from the Franchise Council of Australia, and on FCA meetings suggested:

Yes, they are out of touch and when you go to their meetings it’s similar to being placed in a fish bowl where the scavenger affiliates simply want your cheque book.

The question now is whether reputable franchisors will ‘come out’ as angels or accept the industry taint of rogue franchising and ongoing internet exposure.  

Jim Penman has also recommended that franchise systems be registered and that thorough surveys of the industry be conducted to ensure transparency creates healthy competition in a healthy industry.    

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