The future for franchises
6. Provision to include all affected franchisees of a group in ACCC actions.
In theory, this means franchisees who are wronged can seek legal reparation without an enormous cost. Similar cases could benefit from a group action, however the grouping of any action in most cases may not be effective because each franchisee would have a very different situation.
7. The creation of an expert panel to advise on inappropriate franchising behaviours to be covered by the Code.
This could be of assistance to the industry, however it is always dependent on the criteria set for the panel members. In many cases, these panels may have academics and consultants with little industry experience and whether it actually works or not does not become the issue, it seems that it is just set up to satisfy what was requested politically. If the members are not in touch with the realities of franchising, their recommendations may have little or no relevance to what really happens day-to-day in franchising. The success of the panel, in the eyes of the franchising community, will depend on the recommendations it makes.
Business in focus
As the founder and ‘chief chook’ of fast food retail franchise CHOOKS fresh & tasty, I believe formalising the standards can only develop franchising further. Any changes that are made with good intention for the benefit of all parties is a win-win situation.
If franchising is held to higher official standards through regulations, then that can only build the confidence of potential franchisees. It is important to note that the proposed changes do not alter the framework of franchising, which is a proven method of doing business, which works extremely well and has done so for many years. I believe it will merely hold franchisors and franchisees to the standards most already hold themselves to.
Where to now?
The panel was due to make its recommendations to the Government by late January. At the time of writing, no announcement had been made about the panel’s recommendations. An announcement is expected within a few months, according to Government sources. The changes to regulations in the Code announced in November by Minister Craig Emerson are currently being drafted. Until any changes are actually completed, it is impossible to give a final verdict, but from the work so far, it seems the anticipated changes should be a positive development for the franchise community.
The regulator, the ACCC, is a good source of information for those in the franchising community. You can subscribe to franchising updates on their website: www.accc.gov.au. Griffith Uni in conjunction with the ACCC is also running a free online course for potential franchisees starting this July.
–Steve Hansen is the founder and ‘chief chook’ of retail franchise group CHOOKS fresh & tasty and the immediate past president of the WA chapter of the Franchise Council of Australia.