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The Western Australian Parliament yesterday voted down the Private Members Bill introduced by Peter Abetz MP to regulate franchise operations in that State.
The controversial Bill sought to expand upon the Franchising Code of Conduct and included greater "end of term" obligations, a specific "good faith" obligation and a wider array of damages for breaches.
The proposed Bill drew criticism from legal circles and the Franchise Council of Australia as "going too far" and having the potential to damage the franchising sector in WA and even throughout Australia.
Proponents pointed to the lack of real reform at a national level requiring individual States to address what many consider to be serious shortcomings with the Code.
Unlike the recently passed South Australian legislation creating a Small Business Commission, the WA Bill (pdf) was targeted solely at franchising. Whether WA will now move towards the South Australian legislation remains to be seen, but there were significant differences between the two States in the reforms they sought to introduce.
Upon formally including franchising matters under the Small Business Commission Bill (yet to be done), SA will have effectively introduced a "good faith" requirement into franchise dealings, which the Federal Government specifically declined to do in its most recent amendments. However SA does not have the same 'end of term' or expanded damages regime which drew the sharpest criticism of the WA Bill.
For the time being at least, SA will be going it alone in regulating franchising conduct at a State level.