Coalition’s review of the franchise sector means potential penalties for frachisors but may also deliver national consistency

By Judith Miller, Cynthia Sica and Rose Bollard

Consistent with its pre-election campaign promise, the coalition government has announced that this year it will review and amend the Franchising Code of Conduct to improve protections for small business franchisees. It will implement some recommendations made in the 2013 Wein review and amendments may include the introduction of penalties of up to $50,000 (£27,000). If successful, this will be the first time that penalties have been introduced into the compulsory industry code.

As we reported last year, the code was recently subject to a major review and the previous federal labour government subsequently released a response to the review, accepting in full or in principle the majority of the recommendations made. However, due to the timing of the 2013 election, the proposed changes were never legislated. The current government is now eager to introduce a number of changes to the code to assist franchisees who frequently complain of a significant imbalance of power in their relationships with franchisors.

Small-business minister Bruce Billson has cited the following as key issues to address in franchising regulation…

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