Franchising Updates

Report of Parliamentary Enquiry Into Franchising Code Delayed

The report of the Parliamentary Committee's enquiry into the Franchising Code has been delayed yet again to 14 March 2019, after being delayed from the original reporting date of 30 September 2018 to 6 December 2018, and then once more to 14 February 2019.

The last delay followed further hearings by the Parliamentary Committee in late November 2018, after former executives of franchise group Retail Food Group (RFG) were called in for questioning. RFG owns high profile brands including Brumby's Bakeries, Gloria Jean's Coffees and Michel's Patisserie and was in the media spotlight often in 2018. The present further delay is not surprising, given the number of submissions and hearing material collected by the Committee during the enquiry.

The Committee's enquiry into the operation and effectiveness of the Franchising Code of Conduct began in March 2018 and received over 200 submissions, including a submission by The Franchise Lawyer. Among the questions being examined is whether the current regulations ensure full disclosure of all necessary information to potential franchisees, whether dispute resolution procedures under the Code are effective, and the adequacy of the termination provisions in the Code.

Submissions were made by a wide range of participants in the franchising sector, including consultants, lawyers, franchisors, franchisees, franchise associations and government bodies. Numerous submissions were made by franchisees who had experienced serious misfortune in their franchised businesses and whose names were withheld when their submission was made public. The submissions include countless suggestions for improvements in the regulation of the franchise sector.

The sector awaits the report of the enquiry with interest. It is expected that the enquiry will lead to further changes in the law but at this stage, the extent of likely changes is uncertain.