Changes to franchising will not affect those already doing the right thing

Michael Paul, Chairman, Franchise Council of Australia

The ground work has been laid for the anticipated changes to our sector.

At the time of writing, the Federal Minister for Small Business, the Honourable Bruce Billson has introduced to Parliament, the Competition and Consumer Amendment (Industry Code Penalties) Bill 2014 (the Bill).

The Bill essentially creates a provision enabling the ACCC to either seek orders for civil pecuniary penalties or issue infringement notices for contraventions of certain sections of the Franchising Code of Conduct (the Code).

Currently the ACCC does not have this power.

The ability to apply infringement notices is the first step in ensuring the clear passage through Parliament of the changes to our Franchising Code of Conduct later in the year.

Once the ACCC has been granted the power to issue infringement notices, and the new Code provisions have passed, failure to comply with some Code provisions will carry a financial burden for both franchisors and franchisees.

Interestingly, the pecuniary penalties will not apply to the entire Code. In the Bill’s second reading in Parliament in July Billson said penalties would only apply to “provisions of the Franchising Code of Conduct that are fundamental to the purpose of  the Code and where non-compliance is likely to cause significant detriment to the other party.”

Though we are not yet certain which provisions those will be, this points to a Code and a regulator with clear parameters to work within to enhance the franchising sector, rather than a watchdog who will be bogged down by red tape. These changes will be implemented with the intention of keeping a transparent and fair environment in which to do business, they are not a means to raise revenue and certainly not designed to increase compliance costs.

Our Franchising Code is the most robust in the world. The Competition and Consumer Act amendment tabled in Parliament provides further protection to the vast majority of us who already do the right thing and will not hinder any franchisor or franchisee from being successful.

Successful franchisees in 2014

Some of those franchise brands in the country that are not only compliant with the Franchising Code of Conduct, but uphold the FCA member standards have been recognised in the recent FCA Excellence in Franchising Awards. At the time of writing the regional awards are happening around Australia. Already, we’ve seen franchisees and support staff acknowledged for their outstanding business achievements and contributions to the franchise sector and their community in Queensland, New South Wales and Western Australia. By the time of publishing, all the regional winners will have been announced and beavailable on our website (

The awards are designed to recognise franchisees in various sized businesses (businesses with multiple locations, businesses supporting a group of staff and businesses creating growth and success with minimal help) as well as serving as a way to evaluate your business through the submission process. Anthony Hamod from Fastway Couriers Wollongong, winner of the NSW/ACT Franchisee of the Year (two or more staff) award for the second year in a row explained the value of the awards was not only in the brand awareness it can create, but in the submission process itself, “The (submission) process is a great way to review your business performance overall. Obviously we compare performance year on year, but going through the entry process gives you that big picture in all aspects of the business including community involvement,” he said.

Winners so far span a range of industries and experience levels and serve as a fantastic indicator of some of the truly great things happening in our sector. I would like to congratulate franchisees, support staff and women excelling in the sector from Bakers Delight, Fastway Couriers, Grill’d Healthy Burgers, HydroKleen, The Cheesecake Shop, Jamaica Blue, Begin Bright, Mister Minit and Poolwerx to name just a few. All the regional winners will go on to compete as national finalists, with winners to be announced at the MYOB FCA Excellence in Franchising Awards Gala Dinner on 28 October at Allphones Arena in Sydney.

Along with the regional finalists, we will also be naming the Australian Established and Emerging systems for the year along with a host of other accolades.

Stay tuned later in the year to see who the big achievers are in 2014.

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