The Franchise Council of Australia moved swiftly to ensure the
Federal Government was aware of the industry position in relation
to possible unintended consequences of the Federal Government's
consultation paper 'An Australian Consumer Law: Fair
markets - Confident consumers' consultation paper
(Paper). The FCA agreed that the implementation of
a national system would, '...enhance consumer protection,
reduce regulatory complexity for businesses and encourage the
development of a seamless national economy'. However, the
Franchise Council of Australia expressed concerns as to the scope
of the proposed reform and the encroachment of the proposed laws
into business-to-business transactions. Specifically, the Franchise
Council of Australia observed that the:
definition of "consumer" should not
be extended in order to capture business-to-business transactions;
prohibition on the use of standard form contracts should
not apply to transactions between franchisors and
In a submission drafted by Stephen Giles and Jessica Rowe for
the FCA, the FCA made the point that the terms of a franchise
agreement are by necessity standard form, as they are designed to
ensure consistency throughout a franchise network. An amendment to
extend the definition of "consumer" to capture
business-to-business transactions will therefore potentially
capture many franchise agreements. If this occurs, the franchise
sector will be thrown into turmoil, placing at risk the substantial
economic contribution that the sector makes to the Australian
The FCA asked the Government to confirm either that the
definition of "consumer" will not be extended to capture
business-to-business transactions, or there would be a specific
exemption from the application of the legislation for a franchise
agreement as defined in the Franchising Code of Conduct.
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The Sportscraft refunds and returns policy limitations went beyond consumer's rights under the Australian Consumer Law.
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