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CANBERRA: The Minister for Small Business in Australia has released an outline of changes to the Franchising Code of Conduct. Franchisees will be denied reviewing the detailed amendments until they are published by the ACCC.
The release deals with a number of issues scrutinized by the Emerson Expert Panel and include selected recommendations from the Inquiry into the health of the franchising industry and the ACCC regulatory performance.
Other recommendations made by an expert panel set up to consider the code and unconscionable conduct included changes to unilateral contract variations, unforeseen capital expenditure, attribution of legal costs, confidentiality agreements and the sale of the business. WA Today
The Minister has called on the ACCC to build case law however there is as yet no indication as to how the government will support and ensure an effective effort.
I also encourage the ACCC and other regulators to take a robust attitude to enforcing the law, both to provide a deterrent for inappropriate business conduct, and to build the body of case law to inform our common understanding of the law. Emerson Media Release: ‘Better Protection for Franchisees’
The Franchise Council of Australia opposed most recommendations as radical change.
Advocates for change have endeavoured to alter the regulatory framework in several ways over the past few years. There have been attempts to more radically change the Franchising Code of Conduct, to introduce a new statutory duty of good faith, to redefine unconscionable conduct such that it in fact prohibits conduct that is unfair, to introduce State based franchise legislation and now to introduce “examples or principles” of unconscionable conduct. If no action is taken in this instance there is quite likely to be more action at a State level. Norton Rose
Clearly one of the continuing concerns for Australian franchisees is that any franchise law reform will achieve very little until franchisees can access affordable remedy instead of the present situation where legitimate franchisee complaint is rail roaded by the larger franchisor budget.
A detailed report will be published as soon as it is available.
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