Australian Franchise Law, the Nick of Time

As the South Australian franchising law looms on the near horizon the FCA continue to shake the fear tree.  Professor Frank Zumbo has called upon the Minister to change federal law. And that is all he has to do …. change it.

The recommendations from 3 inquiries are on record and the South Australians have kindly provided a template.

MP Tony Piccolo and the South Australian parliament were clearly hoping to avoid state Law. When the previous federal minister eventually dished up a few frilly amendments to federal disclosure requirements the Parliament of South Australia believed it was given no choice.

The federal government did not meet its obligation to the current and historical needs of franchising. Emerson gave no way forward on fair and reasonable access to franchise dispute remedy. He gave nothing by way of meaningful deterrents for those who breach the law.

.. franchising requires a national approach and the Australian government intends continuing on the path of a uniform, national system.  Minister Nick Sherry

Yes Minister; you might have missed it but no one ever disagreed. However; away from the FCA and their associate parasites, the greatest weight came from stakeholders, independents industry experts, politicians and academics in calling for an effective national approach. 

One does not have to sniff around the ignored recommendations and key submissions to appreciate that the common logic always pointed squarely to systemic opportunism requiring federal intervention.

This initiative has the potential to be at the forefront of best franchising practice worldwide; all that is needed is to get the balance right.   Simon Young

I would only suggest that Mr Sherry meet with Mr Piccolo and Mr Ripoll and forget the failure of Mr Emerson.  Sherry could resolve everyone’s concerns and strengthen the Trade Practice Act within weeks if he is a listener. Reform must include addressing the systemic abuse of third line forcing in s47 and s93 and ensure an effective role for the Australian Competition Tribunal.

Bi-partisan federal support and calls for federal intervention are not about to evaporate after South Australia introduces its franchise law. Only those who profit from systemic opportunism in franchising deny its existence.

What underpins it all is that small businesses are people. They are treated as small versions of big companies, which is palpably not true. We want protection in areas such as contracts – that is the number one priority for the new minister. Number two is getting an ombudsman for small businesses.  Peter Strong, Council of Small Business of Australia

The Franchise Council of Australia bleats about increased compliance costs when the only franchisors who will be forced to endure such costs would be those who are not compliant with the federal Franchising Code of Conduct. For quality franchisors it would be business as usual.

 I actually believe it will make South Australia a more attractive place to invest because there will be clarity on what franchisees can expect and regulatory certainty on what franchisors can expect.

There's a bit of a scare campaign being mounted by the FCA. I understand that. But if a franchisor is compliant with the (Federal)Code, they have nothing to fear from the South Australian legislation.  Professor Frank Zumbo

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• Unanimous Parliamentary Support for State Legislation
• Australian Politicians Continue to Raise the Franchising Issue
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