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Increased Australian Franchise Disputes and Collapses Likely

Troubling Times
A day of reckoning for Australian franchising?

While the Australian Federal Minister for Small Business, Craig Emerson MP, is unwilling to discuss franchising and/or the recent Federal Inquiry into Franchising with Australian peasants; Jacqui Walker's article at SmartCompany.com.au predicts a troubling year for many in, or considering franchising.

Jacqui touches on much of what is being touted by franchising (sellers and licensors of franchises) as a potential boom on the back of increased unemployment during the "global financial crisis" while many consider this to be dangerous times for those contracted to shaky franchise systems. 

Frank Zumbo, an associate professor at the University of New South Wales who has studied Australia's franchising sector closely suggests "there will be a day of reckoning and it's coming very quickly."

On Free or Discounted franchising the Professor suggests "It's irresponsible. It shows the franchisor is treating the franchisee as a moneybag to be exploited.  It's important that franchisors don't throw out good franchise selection criteria simply to raise cash."  

Franchise Advisory Centre's Gehrke recommends that for every $1000 to be invested in a franchise, the prospective buyer must spend at least one hour in due diligence and to verify every statement made by the franchisor.

Franchising feels the pain

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