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Log In / Register | Jul 23, 2014

Australian Franchise Code Review and Good Faith

In the midst of the post Christmas/New Year frenzy the Australian Minister for Small Business quietly announced the commencement of a review of the Franchising Code of Conduct with little time for submissions.

The Inquiry is to review the performance of the 2008 amendments to the Code and also to inquire into;

  • good faith in franchising;
  • the rights of franchisees at the end of the term of their franchise agreements, including recognition for any contribution they have made to the building of the franchise; and
  • the operation of the provisions of the Competition and Consumer Act 2010 as they relate to enforcement of the Franchising Code.

The much criticized amendments were loudly considered to be meaningless window dressing by franchisee advocates following two state and a reluctant federal Inquiry which had handed down very broad and similar findings and recommendations which were to be mostly ignored by the Small Business Minister at the time, Craig Emerson.

It is unknown as to whether the Franchise Council of Australia will again utilize personal attacks against pro-reformists politicians and other franchisee advocates.

The ACCC has come under continued criticism from franchisees for its failure to enforce the Code.

The former chairman Graeme Samuel was deservedly and constantly attacked for what appeared to be an ‘influenced’ agenda to withhold franchise investigation resources. His integrity was later bought into question over his multi-million dollar personal investments.

The current Chairman, Rod Sims has suggested the ACCC needs more power if it is to be effective.

Following the hushed announcement of the Review, little time has been given with submissions closing on February 15.

One franchisee advocate has questioned the impartiality of Mr Alan Wein who is to conduct the Review.

His biography suggests he has widely embraced the processes that have failed franchisees.    Ray Borradale

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