FCA working to ensure certainty in franchise contracts

Warren Wilmot, Chairman, Franchise Council of Australia

Entering into a franchise contract is a significant step for a new franchisee and franchisor as they embark on what has often been termed a ‘commercial marriage’. A substantial investment of time, money and resources will be required from both parties too if the venture is to be a success.

It’s essential then that both franchisee and franchisor can rely on the certainty of the contract they have entered into.

That’s why the Franchise Council of Australia has been working collaboratively with the Federal Government, including meeting with Federal Small Business Minister Bruce Billson, with the view to ensuring there are no negative impacts on franchising from the Federal Government’s proposed extension of unfair contracts legislation to small business.

Essentially, the Federal Government is committed to delivering on its election promise to introduce legislation to prohibit ‘unfair contract terms’ in ‘standard form contracts’. Though this is a complex issue with several factors, at its core, the FCA has sought to show a typical franchise agreement should not be considered a standard form contract.

The FCA’s submission to the Government on the proposed legislation raises concerns that the legislation will undermine the certainty in franchising arrangements, and further inhibit small business access to finance. In the submission, the FCA has also recommended that if the legislation is enacted the franchise sector should be exempted, as we already have a comprehensive regulatory framework that includes disclosure, a mandatory 14 day period to facilitate due diligence and advice, advice certification requirements and a cooling off period. In light of this, franchise agreements should not fairly be at risk of being considered ‘standard form contracts’.

At the time of writing, the proposed legislation was before the Federal Parliament. The FCA remains hopeful that the logic of its submission, and the good relationships the FCA enjoys with the Small Business Minister, Treasury and the ACCC, will ensure that amendments are made that preserve the integrity of the contractual regime that underpins franchising.

Regional Excellence in Franchising Awards

The Franchise Council of Australia has been celebrating franchising success at the Seek Commercial FCA Regional Excellence in Franchising Awards for 2015.

The Regional Excellence in Franchising Awards are a fantastic opportunity for franchise brands to showcase highperforming franchisees and celebrate those making a difference in their business, their system and their community in categories including Multi-Unit Franchisee of the Year, Field Manager of the Year and Franchisee Community Contribution and Responsibility. Once again in 2015 there was strong competition across all categories, with the awards providing entrants with a valuable opportunity to reflect on their own achievements, systems and processes as part of the submission process.

“We’ve been through several awards processes as we’ve grown and the Franchise Council of Australia was the pinnacle,” said Andy Stribling, who along with his business partner Colin Webster won the QLD/NT Multi-Unit Franchisee of the Year Award for 2015.

“You really do analyse exactly what you’ve been doing based on the criteria of the awards. It’s really helped us with our business planning for the financial year ahead of us and what our strategic goals and mission is going to be,” he said.

At the time of writing, awards nights had been held in Brisbane and Sydney with brands including Ella Bache, First Class Accounts, Boost Juice and Salsa’s Fresh Mex Grill, Paleo Café, PRDnationwide Real Estate, Bakers Delight, Mister Minit, Frontline Recruitment Group, Foodco and Fastway Couriers amongst those recognised so far. Awards events in Adelaide, Melbourne and Perth will be held throughout August. I would like to add my congratulations to all the winners and finalists of the Seek Commercial FCA Regional Excellence in Franchising Awards for 2015.

The regional winners are now off to the MYOB FCA National Awards, which will be presented at the National Awards Night on the Gold Coast on 13 October. Along with the regional finalists, the National Awards will also provide recognition for the Australian Established and Emerging franchise systems for the year along with a host of other accolades.

W: www.franchise.org.au