Australian Government Announces Inquiry into Franchising

Submitted by Deanne de Leeuw on Sat, 2008/07/05 - 20:18.

On 25 June 2008 the Australian Federal Parliament Joint Standing Committee on Corporations and Financial Services resolved to inquire into the Franchising Code of Conduct and related matters.

This follows the recent State inquiries held in Western Australia and South Australia.

The terms of reference are:

The Committee is to inquire and report on the operation of the Franchising Code of Conduct, and to identify, where justified, improvements to the Code, with particular reference to:

1. the nature of the franchising industry, including the rights of both franchisors and franchisees;

2. whether an obligation for franchisors, franchisees and prospective franchisees to act in good faith should be explicitly incorporated into the Code (having regard to its presence as an element in paragraph 51AC(4)(k) of the Trade Practices Act 1974);

3. interaction between the Code and Part IVA  and Part V Division 1 of the Trade Practices Act 1974, particularly with regard to the obligations in section 51AC of the Act;

4. the operation of the dispute resolution provisions under Part 4 of the Code; and

5. any other related matters.

The Committee invites submissions by 12 September 2008. The Committee will report by 1 December 2008.

Please send submissions to corporations.joint@aph.gov.au or by post to -

Committee Secretary
Parliamentary Joint Committee on Corporations and Financial Services Department of the Senate
PO Box 6100 Parliament House
Canberra   ACT   2600

Emailed submissions should include full name, address and phone contact details so that they can be verified.

For further information please contact the committee secretary on (Australia) 02 6277 3583.

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Int'l Attorney Zeidman Says Australian Zee Complaint Meritless

Submitted by Don Sniegowski on Thu, 2008/07/17 - 13:01.

Phil Zeidman, a renowned international franchise attorney and general counsel to the International Franchise Association, observes what little regulation the world has is almost always legislated by a central government, as opposed to the American federal model. Zeidman thinks that is changing, most recently with Canada and now possibly Australia.

If there is to be any legislation at all, Zeidman argues that the federal (central) government is best positioned for franchise chains that almost certainly want to develop regionally and then nationally.

"perhaps the most level-headed comment came from the Chairman of the Franchisee Association of Australia, who said, 'I do oppose six or eight individual and territory pieces of regulation and legislation Franchising is a national business; it needs a national solution.'"

According to Zeidman, a rich Australian franchisee with strong political ties is upset that his own franchise agreement has reached maturity without being renewed by a multi-national franchisor. The franchisee now wants Australia's government to change the law to create a right so that his considerable franchise empire can remain under his ownership.

"As a matter of substance, the franchisee's complaint would appear to have no legal merit:  It is clear under Australian law that the parties can agree to a franchise agreement with no right to renew. Nor is there a great deal of precedent for a legislative remedy to the franchisee's discontent:  A study of the franchise laws in some 50 jurisdictions in the world (including each of those in the United States) reveals only a tiny minority which might provide redress in this circumstance."

Philip Zeidman of DLA Piper Rudnick Gray Cary has been a global Franchise Lawyer of the Year 2005 and 2006 in the Who’s Who Legal Awards.

Read attorney Phil Zeidman's full comments in Franchise Times

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