Background
The Franchising Code of Conduct (Code) was introduced in 1998. Since that time, the Code has been reviewed and amended several times. The most recent of these amendments were in 2008 following a federal enquiry and then in 2010.
The 2008 amendments were designed to improve disclosure between franchisors and franchisees (including prospective franchisees). The 2010 amendments focused on end-of-term arrangements, disclosure of additional information by franchisors, dispute resolution and good faith. Additional powers were also granted to the Australian Competition and Consumer Commission in 2010, including the right to audit business for compliance with the Code.
The 2013 Review
This current review will focus on all aspects of the Code. However, there will be a particular focus on the amendments made to the Code in 2008 and 2010, with consideration paid to whether those amendments are working as intended.
The review will also in particular consider the following issues:
- questions of good faith in franchising;
- disclosure;
- end of term arrangements for franchisees;
- dispute resolution; and
- the operation of the Competition and Consumer Act with respect to enforcement of the Code.
The review will be conducted by franchising industry expert and lawyer Alan Wein. Mr Wein has been requested to prepare a report containing the findings of the review within three months.
The franchising industry is encouraged to make submissions to the review. A discussion paper " Review of the Franchising Code of Conduct" has been developed to assist with the preparation of submissions to the review.
The closing date for submissions is 15 February 2013. The FCA (Franchise Council of Australia) is making submissions on behalf of its members.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. Madgwicks is a member of Meritas, one of the world's largest law firm alliances.
