The world of franchising is a heavily regulated area of business in Australia, and as we know first-hand from our years of experience as franchisors: it can be a complicated beast.
3 years in the making and to be implemented next month, the 2021 changes to the Franchising Code of Conduct require franchisors to review and update their system by July 1, 2021.
Following our partnered virtual workshop with BlueRock, which featured a detailed discussion on the changes, here is a summary of what they mean for YOU:
1. Transparency
From a Key Fact Sheet to disclosing info on rebates, transfers, leases, rights to goodwill, and disputes… Franchisors are now required to provide a suite of new information to franchisees within their disclosure documents and franchise agreements, and importantly, within the specified timeframes.
2. Franchisee rights
These extended rights will have little impact if your franchise system is set up thoughtfully, and with the protection of your franchisees in mind. Changes to cooling-off periods, and rights to terminate are included within this section of changes and require franchisors to modify elements of their franchise agreements.
3. Franchisor obligations
There have also been changes to marketing funds, future capital expenditure, franchisor’s legal costs, and restraint of trade. These elements require franchisors to reflect on and update their disclosure documents and franchise agreements accordingly.
4. Disputes
The string of changes made for dispute resolutions hammers home our key tip for franchisors: have a plan for resolving issues, and act proactively – ALWAYS. The incorporation of Alternative Dispute Resolution (ADR) processes such as conciliation, mediation, and arbitration, will need to be familiarised by franchisors – and potentially updated in franchise agreements.
Setting up your system right is vital in this sector, and we have dedicated and experienced franchise development and franchise law experts on hand to guide you through.
Whether it’s tackling issues, developing out your perfect system, or simply growing your business, give us a buzz today and let’s get the ball rolling.
For a recording of our recent Virtual Workshop:
Reforms to the Franchising Code of Conduct → CLICK HERE
For a PDF summarising the changes and our recommendations. → DOWNLOAD HERE
