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The Emerson Franchise Panel

The Australian Minister for Small Business has announced the makeup of the expert panel to review selective ‘outstanding issues’ tabled in recent parliamentary Inquiries into franchising.

The Panel will examine the possibility of including into the Franchising Code of Conduct examples of unconscionable behaviour and ‘include unforeseen capital expenditure, unilateral contract variation, attribution of legal costs and confidentiality agreements.’

Professor Bryan Horrigan, Associate Dean at Macquarie University, David Lieberman, a mediation panellist with the Franchise Code of Conduct and Ray Steinwall, member of the Australian Competition Tribunal and the Commonwealth Consumer Affairs Advisory Council, have been appointed to the panel. 

The Panel will not be considering the inclusion of good faith, a directive to ensure ACCC enforcement of the Code including the running of effective test cases, or access to affordable remedy that is central to abuses of the financial imbalance between franchisees and franchisors.

A list of examples of unconscionable conduct would potentially be a very long list.  The question is whether such an inclusion will effectively deter rogue franchisors and ultimately change anything without Emerson also having the courage to go further to put in place deterrents against the abusive practices that caused the disastrous consequences that instigated the Inquiries. 

There are no serious penalties and they are not being considered.  There will be no deterrent Tribunal.

Quality franchising will remain hidden amongst the vastness of those systems that fail to deliver whether that failure is due to poor or deliberate design.

Ultimately Emerson will make no difference to franchising in Australia.  In essence he is saying that if you buy into the franchising relationship that is your problem.

The narrow parameters given to the Panel now insure that the majority of Australian franchisees will now view the final outcome of the Hook, Line and Sinker Inquiry as an impotent Rudd government whitewash. 

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