The Franchise Council of Australia (FCA) is seeking input from franchise systems to enable it to effectively contribute to the review of the Franchising Code of Conduct flagged for 2013.
The FCA is keen to ensure that the Code review is thorough, and any changes to the Code improve the regulatory framework and do not impose an unreasonable compliance burden.
The Norton Rose Australia franchising team is compiling a comprehensive submission to supplement the FCA's official submission. Our submission will focus on drafting and interpretative changes that will reduce compliance costs, and make disclosure more meaningful. To date we have identified the following key areas for improvement:
- exemption for foreign franchise systems from the requirement to annually update a disclosure document where the foreign franchise system has only granted a single franchise in Australia
- clarification of the disclosure obligations concerning master franchising and multi-level franchise systems so that there is no obligation to provide multiple disclosure documents, but the nature of the master franchise or multi-level arrangements must be fully explained in the disclosure document provided by the entity making disclosure to the franchisee
- clarification of the disclosure process so that the requirement to make double disclosure is avoided
- exemptions from providing a disclosure document and complying with Code disclosure processes and time periods where the franchisee is an existing franchisee or a sophisticated investor and consents in writing to the exemption.
If you would like to contribute to the submission or have any comments on Code compliance generally please contact Stephen Giles.
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