Following an extensive review of the Franchising Code and the publication of the Wein Report the Government has initiated amendments to the existing regulatory framework by introducing, effectively, a new Franchising Code of Conduct.
Following on from last year’s review of the Franchising Code of Conduct by Mr Alan Wein (see here), the Government has recently released an exposure draft of amendments to the Franchising Code of Conduct and relevant provisions in the Competition and Consumer Act 2010 (‘the CCA’), along with a ‘Future of Franchising’ statement on the policy reforms.
The 2013 Review of the Franchising Code of Conduct Report undertaken by Mr Alan Wein was today released to the public.
Mr Wein’s report was submitted to the Minister for Small Business on 30th April. His task was to prepare a report on his findings and recommendations in regards to:
One of the advantages of buying into a franchise is the ability for a franchisee to leverage from an established and successful business. In order to maximise the effect of the franchise system, those franchises that operate from retail premises such as a shop should have the same look and feel across all stores, highlighting the replication of a singular brand and product.
If tension between two parties in a relationship is not properly dealt with, it can lead to further misunderstandings, mess, and a much harder problem to resolve. In difficult economic times, and as financial pressures increase, disputes in business relationships inevitably arise.
New franchise owners enter the market with the hope of trading profitably, and then eventually selling their franchise for good capital gain. Out of the franchise owners who do eventually sell, some fail to maximize their profit for various reasons.
The ACL creates a national unfair contract terms regime which applies to standard form consumer contracts and enables a court to find that a term of such a contract is unfair, and so void. This law applies to contracts in all forms including those made online, over the phone or face to face.
In franchises which operate from retail premises, such as most restaurants and retail franchises, the franchisor will usually either select or have a right of veto over the premises. The way in which the leasing arrangements are structured can have a significant impact on a franchisee and its business.
One area of uncertainty with prospective franchisees is how long their franchise agreement will operate. Sometimes this is quite straightforward, but not always. As franchisees often ask us this question, we will summarise the key issues.
The Federal Government has announced important changes to the Franchising Code of Conduct, and some ancillary provisions in the Trade Practices Act, including: