Australian Franchise Inquiry Reports and Recommends...
Submitted by Jenny Buchan on Mon, 2008/12/01 - 06:48.
The Parliament of Australia's Joint Committee on Corporations and Financial Services has published its report following its extensive review of franchise regulation in Australia. Franchising regulation in Australia is a matter for Commonwealth regulation so this committee's 11 recommendations will be influential.
You can access the report here.
Re: Australian Franchise Inquiry Reports and Recommends...
A clear message should have been sent to Giles, O'Brien and the FCA by the Australian Government that they were not going to tolerate this behaviour any longer. Bullying and intimidation is the cornerstone of franchising. One only needs to read the submissions.
The Committee should have followed through with the Contempt of Parliament charge and these jokers should have been hung drawn and quartered and 'struck off'. The sheer arrogance of these guys. No wonder franchising is in the state it is in. These are the people who have been advising Government and the 'hustlers' for many years. It's a joke.
I wonder if I wrote a letter to the bank to say sorry for not being able to make the mortgage payment - will they write back and pat me on the head and say don't worry about it, try not to do it again. Not bloody likely.
WHAT A JOKE!!!
OOPS FCA...Not real smart from the so called "peak body". If that's what we have to look up to, then we are better off without them.
Actually as franchisees we are without them...as they so aptly prove in this disgraceful incident.
And from 2 of the supposed most senior people at the FCA...NAUGHTY NAUGHTY!!! Is their own behaviour in accordance wit "the Code" and their own "Member Standards"
Just goes to show, you give them enough rope and they wll hang themself...WHAT A JOKE
No we see why nobody gets anything done about a complaint....
Bully Boys
What absolutely disgusting behaviour to threaten a Parliamentary witness. And one whom you are in the process of completely "financially raping."
The gentleman at the centre of this unfortunate incident was once touted by the franchisor as an excellent operator and an example to others as the "right" way to grow your business!
What's to be done when zees are too terrified ( and too poor) to stand up to those who would gladly take everything they own?
I am one of these and Im at a loss what to do other than bend over, assume the position and hope the assault is over quickly.
I agree with others that the FCA should have the book thrown at them over this behaviour as a clear message that this will not be tolerated.
The lack of punishment only serves to heighten the fears of those trying to escape the clutches of this horrible, horrible man and his FCA cronies.
That aint nuthin compared to YUM threatening a state government
The IFA and the leadership franchisors are so bloody arrogant that they thnk nothing of threatening anyone or any institution.
When Iowa, some years back, enacted a new franchise law attempting to deal with relationship issues, YUM actually threatened not to put any more franchises in Iowa unless it was repealed - Can you believe this. Then their representative (an officer) showed up at an IFA committee meeting and bragged about it.
If you think there is any level of "stuff" from which the franchisor power structure will shrink, you are very mistaken.
There is no respect for anything or any principle except getting their own way - much like the auto companies flying to Washington last week, denying any part in the industry's problems and insisting upon funding to prevent a giant economic collapse - as if the market had not already provided the effective response to their BS business practices.
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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
Re: Bully Boys
I would like to have a confidential chat if that is possible. You may need to register but you can "click" on my name here and send a private message.
franchise inquiry
The inquiry looks good, the proposed changes will make the sector much more accountable. Good news for franchisees at last!!
Franchisors under fire
Franchisors under fire from Federal Parliamentary inquiry; This article represents where Australia is at this stage in developing franchisee protection.
I have received numerous emails today from franchisees with concerns about the Committee's recommendations. They now need to take the time to read the entire Report and then ask themselves whether many disputes, and disasters, would have been avoided if these were in place some years ago.
There is a need to understand the effect to changing behaviours if penalties are put in place. There is a need to understand the effect that better, not more, better disclosure would have on so many that bought a dud believing it was OK because their disclosure document conformed with the Code.
There is a need to understand the implications of implicit "good faith" combined with access to affordable justice. In simplistic terms "good faith" suggests that a franchisor could lose within an accessible justice system where a Tribunal or an Ombudsman finds that, for example, a franchisor would not have made a particular decision for a franchisee if the situation was reversed and the financial risk or cost was to be borne by the franchisor.
We now have mention of end of franchise term conditions and obligations and the potential to see a franchisee be fairly compensated for the value he added to a business.
I agree with the Committee that the Education process is ultimately the responsibility of prospective franchisees but I have doubts whether the ACCC and the FCA can, or would, do a better job this time around of at least attempting to let prospects know that information is available. And the information currently available doesn't hit hard enough as to the real risks.
I found Appendix 3 relating to a criminal act particularly amusing when I considered the presentation by Steven Giles [Deacons] and John O'Brien [Poolwerx], representing the FCA, at the Melbourne public hearing 2 weeks later.
The FCA are not keen to have most of these recommendations enacted and will be working hard to kill them. I believe these recommendations will enhance protection for the franchising industry and this is far from the minor tweaking many feared. I agree that they could be better but it is a giant step in the right direction.
The reality is that the value or ongoing damage to Australian franchising will depend on the effective application of these recommendations, if they pass through Parliament, by an ACCC with a reputation for disinterest and failure.
It's all about Access to Justice
Cee B,
The FCA has already been been given everything that they ever wanted.
It's full steam ahead for AUS franchising, status quo.
$ as Barrier to Justice: The franchise bar will have an increasing control on disputes (manage, filter, delay) since the only dispute resolution process available has been captured by the franchise bar [and rented to the FCA].
The ugliest dispute must FIRST be heard. The monopoly on access washes any tinkering away.
Les Stewart MBA
Understanding Franchising
Premature Les,
You should read the entire report and the intentions behind the changes to mediation and the introduction of Good Faith etc etc. I'm not suggesting this is a cure-all for Australian franchising but to appreciate the intent of these recommendations it is not only in the reading of them but in the reading of the transcripts from the Committee.
There were a number of problems they were very seious about and one was access to affordable justice. This has to get through and I for one don't want the FCA, or anyone else, to block attempts to get franchisees to get off their butts and counter the FCA efforts.
There are some areas in the recommendations that are vague but we will see what the end result is and we will deal with it because we have no choice. There are some real positives that will make a difference and that is why FCA are throwing up.
In the end it will come down to what is passed in Parliament and what is drafted. If it ends in poo then we will deal with it but I'm not pulling out a razor blade just yet.
What will only matter in the end will be Education and "attack mode" warnings to franchisees. The ACCC and the FCA can be relied upon to produce a short term effort that very few will find. We need to make better information and warnings found.
In 15 hours we will hear the recommendations to define Unconscionable Conduct. This "too hard" weakness within Australian Law has previously shut down the ACCC and the Courts in the majority franchising cases so it is hoped to be another step forward.
Laurence J. Peter: "There is only one thing more painful than learning from experience and that is not learning from experience."
Looking for Love in all the Wrong Places
Cee B,
Well, yes I had read the report and it weighs just as much per page as any of the other US, CDN or AUS prior reports. Leaving aside the timing issue [which is a little personal], we can agree to disagree.
In my opinion, there is a greater cost in chasing a phantom solution [ie. Big Gov't, top down] rather than the nitty-gritty business of small-scale, methodical, technologically-savvy information sharing [bottom up]. Franchise law serves those that buy it; http:// is the answer.
Let's See:
So in the face of this hourly, daily, annual tidal wave of cash, a few pdfs will reverse this tide?
Winnie said Rule #1 when you find yourself in a hole is to stop digging. He never said stop working; Just stop doing what your opponent and his minions are programming you to do.
Les Stewart MBA
Understanding Franchising
Agree Les
Or I don’t disagree for the most part. We will not stand aside and allow the FCA to kill off what will greatly assist. This whole Inquiry has assisted in lowering the credibility of those that promote franchising as safe. The truth will be in the next 18 months so we will see. http// is the answer and I'm working on that.
To produce web that produces maximum effectiveness and is ongoing means to produce something that is extreme and honest and interactive. In Australia we don’t have the luxury of Freedom of Speech; we have the certainty of defamation and slander and those with the money to produce Federal Court Orders to shut you down and/or tie you up. It can be done but it takes money. BMM kicks butt however; the average sucker in Australia looking to buy his little goldmine without any education will not rely on overseas experience. Naive – Yes! But that is what we have to work with.
“Just stop doing what your opponent and his minions are programming you to do.” They wish! This battle this time has found them wanting – only because of their arrogance where they under-estimated the peasants and some bloody heroic politicians and media [because they have always been able to rely on the “fleas” in both professions]. This time we all know it ain’t over until the blonde lady stops singing.
FCA needs better lawyers
Let me get this straight;
The Chairman of the Franchise Council of Australia, John O'Brien [Poolwerx franchisor], had a Director of the FCA, Stephen Giles [Deacons Law firm representing over 200 franchisors and a previous Chairman of the FCA] write a threatening letter to a Poolwerx franchisee advising that if he gave evidence to the Franchising Inquiry O'Brien would pursue him for defamation and libel.
OK; that makes sense. But then I now consider that the Poolwerx franchisor has resigned his position as Chairman of FCA to perform a less demanding FCA role while Stephen Giles the letter writer and self-professed "leading franchising lawyer in Australia" is lobbying to become the Chairman of FCA once again.
Seriously; Giles can't be much of a lawyer if he didn't know that to interfere, threaten, a potential witness to a Federal Inquiry is a criminal offence. If FCA want some new blood why don't they look to Phil Ciniglio, Queensland Director of FCA.
His only tarnish is where submissions to the Inquiry from his franchisees at Forte School of Music provided evidence that this franchisor breaches Code disclosure provisions in a system that don't work, they go broke and then just walk because the franchisor ain't got the money to pursue them. Now that makes better sense.
And the ACCC rely on this "peak body representing all stakeholders in franchising" for advice. Now that makes sense.
Don't mention the name Ciniglio
Don't mention the name Ciniglio to Forte School of Music franchisee's, He is someone who is a waste of space and time.
All talk no action by Phil Ciniglio.
Gillian Erskine Director, Paul Myatt Director and Phil Ciniglio CEO (he was pretending to be a director of Forte School of Muisc) Have all been involved in breaches of the Franchise Code. Which is very surpising when Gillian Erskines husband Ian Erskine is a Barrister here in Queensland, they should of known what the Franchise Code was for.
They were even to scared to come to mediation with us, or attend a National Franchisee meeting held in early 2008.
At least Phil Ciniglio was dumped from the FCA board of Directors.
Darren, was he
dumped or did he choose not to associate with the FCA where the FCA and Stephen Giles were destroying his incredulous reputaion. Afterall, he only a franchise that fabricated disclosure documents and pushed a system that wasn't viable for the Zee; or the zor. Or perhaps it had potential and someone went off course. No matter; it screwed, stumbled and now it goes down.
Or perhaps Ciniglio is just givining us the opportunity to push him out of the closet.
Forte School of Music slides into oblivion. Ciniglio, Erskine and Myatt walk the streets with their heads covered. Another huge franchise [21 max] is about to bite the dust.
I must take this opportunity to emphasize that Barrister Ian Erskine, whilst being the husband of the said Gillian Erskine [Zor], had no knowledge that his wife's company quietly used his status to intimidate these quiet music teacher franchisees. Of course not! He is a bloody barrister - she just didn't tell him.
US franchises available NOW!! Be the first - this is your opportunity:
Forte is the Australian leader in music education and has 11 years experience of developing this proven business system with many successful franchisees.
Ring Philip Ciniglio or Paul Myatt on 1800 003 048 or EMAIL or Find out more"
Please Note: Enquiries from those who can read should not expect a response. To short-cut your due diligence we now recommend you refer to the recent Federal Inquiry into Franchising.
Forte School of Music
Don't try and ring the 1800 number it's now be disconnected, Forte School of Music is no longer a member of the Franchise Council of Australia (FCA). Shows a Franchise system that is on the way out.
The last 18 months 2 Franchisees have walked away from the Franchise, with no attempts by the Franchisor to stop them. 2 have sold for a dollar and another selling for $30000 not bad for an investment of $100000 plus. Yet the Franchisor tries to blame all the franchisees for the failure.