For those of you who have been involved in the Australian franchising sector for a little while, you may recall that the original mandatory Franchising Code of Conduct was introduced in 1997 and seems to have been amended every second year since. Well, that’s not quite right but more recently, we did have some wholesale changes in 2021 and with an April 2025 sunset date, its time for the Government to undertake a substantial review to ensure the recent changes have been effective.
Former ACCC Small Business Commissioner, Dr. Schaper, has been appointed as the independent reviewer, and the Government is seeking input from stakeholders, including franchisors, franchisees, and industry experts such as the FCA.
No really, why do we need another review?
There hasn’t been widespread breaches of the Code, ACCC investigations, media reports of failed franchisees or unscrupulous franchisors ripping off innocent families. In fact, the general perception from within and outside the franchise sector is that franchisors generally handled the pandemic lockdowns well, supporting their franchisees, and local communities, and came out of the covid years with its reputation enhanced.
Please see the latest FCA report State of Franchise Report 2023
However, all laws are subject to the sunsetting provisions which provide that legislative instruments will be automatically repealed after about 10 years, unless action is taken to preserve them. This ensure the laws are kept up to date and remain in force for so long as they are needed.
What are they looking at this time?
- The general fitness for purpose of the Code.
- The role of the ACCC and the Australian Small Business and Family Enterprise Ombudsman in supporting enforcement and dispute resolution.
- The role of the Code in regulating the automotive sector.
- The impact of increased penalties available under the Code to: the greater of $10 million, three times the benefit obtained, or 10 per cent of annual turnover which started from April 2022.
- The Franchise Disclosure Register which has been publicly available since November 2022.
See its current form Franchise Disclosure Register.
How do I find out more?
On 23 August 2023, the Government released the Consultation Paper for the 2023 review of the Franchising Code of Conduct.
The Consultation Paper has split the Key Issues to be examined into five categories:
- The Scope of the Regulation
- Before Entering into a Franchise Agreement
- Enduring Obligations in Franchise Relationships
- Ending a Franchise Agreement
- Enforcement and dispute resolution
What should I do now?
The Government is seeking input and submissions can be made to [email protected]. Alternatively, please contact BDC Strategy CEO and FCA Board Member Tanya Robertson at [email protected] or BDC Partners CEO and FCA Victoria State Chapter Committee Member, Bruce McFarlane at [email protected].
The closing date for submissions is 29 September 2023.