Australian State Franchising Law on The Table?
ADELAIDE, South Australia: South Australian MP Tony Piccolo [Member for Light] has fired a shot across the bow of Federal Minister Craig Emerson suggesting his state could introduce its own laws if the Federal Government does not act on franchising.
‘My concern is that (Dr Emerson) has made comments which suggest nothing much will happen," he said.
"If that's the case, it's of great concern. Three different, independent inquiries have recommended something be done.' WAtoday
Mr Piccolo's interest in franchising began as efforts to right some local wrongs where the victims were among his constituents. Local outrage led him to an obvious conclusion that law and regulation for the franchising industry was outrageously inadequate producing ignored abuse and shocking consequences.
Today Tony Piccolo is accepted throughout Australia as a champion for all franchisees. While he is not alone in efforts to introduce effective and equitable solutions, as a State politician it appears he can make a greater difference without federal shackles. Don Randall [West Australia], Jo Gash [New South Wales], Bernie Ripoll [Queensland] and numerous politicians ignore party differences to stand up for all Australian franchisees but on the federal field Minister Craig Emerson has seemingly cancelled the game.
"Having state-based laws is not desirable, but how long do you wait?" Tony Piccolo
The South Australian inquiry's recommendations are applauded and included:
- Compulsory federal registration with the Australian Competition and Consumer Commission (ACCC) of all disclosure documents.
- Full disclosure of franchisor financial reports with no exceptions.
- Full disclosure to potential franchisees of the risks of failure.
- Publication of the names of those who persistently breach the franchising code.
- Penalties for insufficient disclosure.
- Amending the code to include a duty to act in good faith.
- Amending the code to require parties to a franchise contract to consider goodwill or other exit payments.
- A range of alternative dispute resolution processes, including a body such as a Franchising Ombudsman or franchising tribunal.
- Recognising franchisees' interests on the leases between franchisors and landlords.
- Enhanced education campaigns at state and federal level.
Full South Australian Franchising Report
Minister Craig Emerson has refused to act or heed any recommendations stating that Australia needs to evaluate the impact of changes to the Code introduced by his Liberal party predecessor Fran Bailey. Meanwhile franchising abuses continue and confidence in the industry falters.
The two key changes from Fran Bailey:
- The new obligation to disclose to potential franchisees the contact details of former franchisees.
- The obligation to disclose to prospective franchisees a list of suppliers that pay to franchisors a rebate for goods purchased by franchisees.
Tony Piccolo Feb 2008 -changes inadequate
The key recommendations from the Federal Inquiry can be viewed here.
Prior to the South Australian Inquiry the West Australian government's 2008 report recommended change that was widely condemned as far too little. West Australian Franchising Report
Franchising in Australia is tainted and the Federal Minister's refusal to act has done nothing for the industry while the Kevin Rudd government sentences future generations to continued abuse and disastrous outcomes. Thank God there are some politicians driven by the needs of constituents rather than the influence of well heeled lobbyists.
If franchising laws are to be introduced in one state the flow on promises either consideration of state based laws throughout the country or a change of heart at a federal level. Should South Australia introduce franchising laws then it will lead the country and while we could expect doom's day predictions from the Franchisor Council of Australia; internationally franchising continues to grow in popularity where better regulation and law exists. It is just the shonky operators that leave.
The Australian Federal Government has in recent times instigated various Inquiries that could positively influence franchising. They failed to define ‘Unconscionable Conduct' and the Rudd Government sits on reform to the Franchising Code of Conduct. A current Inquiry is underway to deal with the present charade in ‘Access to Justice' and a ‘consultative paper' was released for Unfair Contract Provisions much to the dismay of the Franchisor Council.
To date however; it would seem that while the Australian Government is prone to Inquiries they appear as nothing more than a search for acceptable pacifiers designed to head off growing community anger while the intention is to maintain only the interests of bigger business and sidestep concern for the little folk and equitable business regulation. The FCA want franchising exempted from any change of law.
"ALP policy clearly supports the reform of the code," he wrote. "The reforms proposed by the parliamentary committees are not about compensating or protecting people who make poor business decisions. They are about ensuring that when franchisors break the law there are effective (rather than theoretical) remedies for franchisees." Tony Piccolo
Mr Emerson has not responded or even voiced an opinion of any aspect of franchising since entering government.
Related reading:
When 'I Accept' is not really 'I Accept'
South Australian Franchising - SmartCompany.com
Silence not golden - Sydney Morning Herald
Private Members Bill - Don Randall
Private Members Bill - Julie Owens
Private Members Bill - Jo Gash
Private Members Bill - Shayne Neumann
- Franchise topic:
- Enter Your Own Tag:
