The Sydney Morning Herald reported on 22 May 2009 that a
frustrated leading state campaigner for reform said he will have no
choice but to introduce his own laws to amend the laws governing
the franchising sector if the Federal Government continues to fail
to respond to the report recommending changes to the sector.
The federal inquiry tabled its report in December 2008. It made
11 recommendations, including monetary penalties for breaches of
the Franchising Code of Conduct (the Code), the provision of good
faith bargaining between franchisors and franchisees, a better
balance of franchisee and franchisor rights and, liability in the
event of franchisor failure.
The South Australian inquiry tabled its report in June 2008 and
South Australian Labor Government MP, Tony Piccolo, who believes
quite strongly that the current franchising laws are inadequate,
was quoted by The Sydney Morning Herald stating that reform of the
Code is "now urgent".
Mr Piccolo noted that three separate inquiries (South
Australian, Western Australian and federal) had recommended changes
but no action had been taken. Mr Piccolo left open the possibility
of state based laws being introduced if the Government failed to
deliver, but admitted that this was not desirable.
Subsequently, on 31 May 2009, Federal Small Business Minister
Craig Emerson announced that the Government was set to respond to
the Parliamentary Joint Committee on Corporation and Financial
Services inquiry into franchising and that the response would take
into account the inquiries that took place in Western Australia and
South Australia. Mr Emerson said that franchising is on the whole a
successful working arrangement that should not be put at risk by
changes to legislation.
He advised that final input would be sought from franchising
stakeholders and an options paper released in the next few weeks
before a formal response, which may be given in late July 2009. He
said that "most franchise arrangements work well and these
good working relationships must not be jeopardised by the
Mr Emerson stated that if the Government's reforms are to be
worthwhile and enduring, it is worth taking the time to get them
On 21 June 2009 the Government released an options paper that
invites final comment from relevant parties and the broader
community regarding the report of the Parliamentary Joint Committee
on Corporations and Financial Services. Comments are due by 10 July
Middletons will keep you advised of the Government reforms when
they are announced.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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