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Australian Franchisees Thank Law Society

The Australian legal industry’s challenge of who runs our Parliaments has never been so clear as it is in the current war to protect grubby riches coming from the destruction of franchisee families. That lawyers bully governments is not a new truth but Members of Parliament are resenting the legal profession’s current manipulation and distortion.    

The clearest example to date comes from the Queensland Law Society’s 15 page [attached] insult to the intelligence of those elected to represent the interests of Australian voters. The FCA submission is a similar distraction.

THE QLS submission may only be representative of frantic efforts but it contains classical distractions from the real issues prompting the Western Australia reform with attempts to cleverly distort truth under the guise of a dignified effort to protect stakeholders.  

The QLS assists the public by advising government on improvements to laws that may apply in Queensland and throughout Australia, and working to improve their access to the law.  Derek Sutherland - Icon Law

The FCA or the legal profession in Australia have not contributed any suggestions for reform and coninue to deny systemic problems in franchising. .

Peter Abetz and Parliamentarians of Western Australia are under attack and not by the FCA franchisor lobby group. Across Australia a small section of the legal profession consider profiteering from a base of franchising abuse under threat.

Rather than summarize the QLS submission it seems obviously important to return to the documented abuses the WA Franchising Bill is designed to remove.  As Peter Abetz suggested yesterday;

Our State does not need to rely on those who breach the Code. Increased franchisee confidence in West Australia will attract and keep honest and ethical franchisors and that will be an obvious boon to our economy.

In ramping up efforts to shut down the franchising reform the FCA mouthing of the legal misrepresentation of what the Bill is to achieve infers an automatic right of franchisee renewal of contract where Bill clearly states no such right exists. It states that where a non-renewal is challenged the franchisor must show ‘good cause’ for non-renewal.

That part of the Bill is firstly designed to shut down the practices by rogue franchisors where three franchising inquiries noted the sector’s trend to use the capital of franchisees to build value in franchise businesses and then simply grab that value for resale from a forced marked down payment for equipment without regard for the good will and sweat equity from franchisees.  In too many franchise models this practice is repeated over and over and produces massive multi-million dollar returns.

Secondly that part is designed to block the not uncommon and documented practices where threats of non-renewal are utilized to shut down complaints of abuse and threatened termination on vexatious grounds.

While the federal government refused to install effective legislation and regulation for the franchising sector the West Australian Bill offers ‘Good Faith’ in recognition of such practices as those involving abuses of franchising operations manuals where franchisee financial models are destroyed by introduced, unfair and unreasonable, franchisor profit streaming from mandatory purchasing demands.

Franchisee investors knowingly enter contract in the belief that franchisors are sustained from royalties only to find that in many cases the cost of mandatory purchasing doubles the cost of being a franchisee and removes any franchising benefit.

Quality franchisors and franchisee investors must be protected from the reputational damage caused by the cowboys and rogues. Those franchisors who fear WA legislation are those who have built franchises models reliant on the ability to abuse or those duped by the lawyers who control franchising in Australia.

The ability of franchisors to refuse renewal and introduce changes to operations manuals is not challenged as they are recognised as critical to the success of the franchise business model. What the Bill achieves is accountability for actions within a one-sided power relationship where the onset of web exposure will inevitably damage the investments of ethical franchisors. The FCA and lawyer lobbyists would rather distract from the evolved needs of franchising caused by those who have distorted the business model.

Penalties are not handed out by the WA Franchising Commissioner although the lobbyists would infer they are. Rather; the Commissioner has the ability upon the results of investigative process to recommend that Courts determine the use of available penalties against entities and individuals directly or knowingly practicing or assisting in breaches of the Code.  

Probably the most critical function of the Commissioner is to allow equitable access to remedy for parties to franchise contracts where historically the abuses outlined have been protected where franchisees being deliberately driven to toward poverty have been excluded from equal participation in expensive litigation. The idea of dispute resolution between the parties and the Commissioner with lawyers optional when agreed to is not an appealing one for the legal profession.

At the heart of the WA Franchising Law are the ugly issues that the anti-reform desperate lobbyists would distract from and ignore.  These issues are the terrible and undeniable escalation in outcomes for small business, mum and dad investors duped and abused under one sided power contracts from a sector heavily promoted to delude investors as to risk.

Those outcomes range from substantial to absolute financial loss and include health consequences, social costs, and the occasional but outrageous loss of life for middle aged investors thrown away to begin from scratch. Threats of violence do not sit well in the Australian psyche.

Such outcomes cannot be ignored and such outcomes cannot be denied for they are on record as protected by the current void of effective legislation and regulation by the Australian Federal Government.

FCA and associates continue to swamp WA parliamentarians with regular spam.

Destroyed mum and dad operators have produced great wealth for the legal profession determined to shut down anything that might threaten next year’s Lexus. 

Essentially there are no flaws in the franchise business model. But there are flaws in current federal legislation and regulation that have encouraged a dangerous upward trend in attracting disreputable operators and lobbyists. Abuse in franchising will be addressed either now or after more innocent families have been destroyed.  WA says Now!

Attached:

Queensland Law Society Submission to WA Premier, Radio Interview with Peter Abetz

Essential and Related Reading at BlueMauMau:

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