Duties of Good Faith and AAFD Standars

Duties of Good Faith and AAFD Standars

Submitted by michael webster on Wed, 2008/05/21 - 08:36.

Liz asks: "Am I correct that the main incentive for franchisors to comply with the AAFD standards is recognition in the marketplace?"

No, while a franchise system might find it valuable to market itself as a fair franchise system, there are two major incentives for a franchise system to conform to the AAFD standards: a) the establishment of an independent viable franchisee association is important for the long term success of a franchise, b) the AAFD standards provide a set of principles for mediating any franchise dispute.  

Mediation, as opposed to arbitration or litigation, is appropriate for those cases in which an ongoing relationship is being maintained.  Not all franchise disputes are capable of mediation, but those which are need to be solved by looking past what the contract provides for in a termination.  The contract language is important, but because it may be incomplete, we need to fill the gaps in a principled manner - the AAFD standards allow this.

Michael Webster PhD LLB
Franchise News

Australia's Franchise Regulation Needs Good Faith Protection By: Liz Spencer (26 replies) Tue, 2008/05/20 - 09:49