New Zealand franchising legislation before parliament


This article appears in the July/August 2013 issue of Business Franchise Australia & New Zealand

There are two major issues affecting franchising that are currently before Parliament – the Commerce (Cartels and Other Matters) Amendment Bill and the review of Part 6A of the Employment Relations Act 2000.

Commerce (Cartels and Other Matters) Amendment Bill.

This Bill was reported back by the Select Committee in early May. As you may know, the potential additional compliance costs for franchise systems were considerable when seeking exemptions from the provisions of the Bill and this was the main  thrust of the Franchise Association’s written and verbal submissions to the Select Committee.

We are pleased that the points we made appear to have been taken on board as the Report recommended to the Commerce Commission that they develop specific guidelines for franchise systems to provide more certainty with respect to collaborative activity.

FANZ has been in touch with the Commerce Commission and offered the Association’s assistance in developing the guidelines as well as assisting with the dissemination of information.

Employment Relations Act 2000 (Part 6A).

The proposed amendments to this section of the Act would create a whole new legal relationship between franchisor and franchisee that would create, not only an unfair competition between a franchisee and an independent small business, but also has major implications for the future of the independence of the two entities as is expressed in a resolution by the 45 member World Franchise Council, the international body representing world-wide franchising. Whilst it is proposed to exempt SMEs  from the transfer entitlements for employees under this provision, the Government is proposing to create a class of “associated persons” that means a franchisee AND the franchisor must employ fewer than 19 persons between them to be exempt.  This is, in the words of a letter from the Minister of Labour, Hon Simon Bridges, to “help ensure that only genuine small to medium businesses are exempt”.

FANZ has already held meetings with the Minister and with the Minister of Commerce, Hon Craig Foss as well as the Minister for Small Business, Hon John Banks and will be making strong submissions at the Select Committee hearing later in the year.

World Franchise Council Meeting – Beirut, Lebanon.

Chairman, David Foster and Executive Director, Graham Billings attended the first 2013 meeting of the WFC in Lebanon in April and by unanimous vote FANZ was re-elected to serve a second two-year term as the General Secretariat – a real accolade to the work we have done over the last two years. On behalf of the WFC, David Foster was also invited to address the President of the Lebanese Republic, His Excellency General Michel Suleiman and to thank him for the personal interest he takes in the development of franchising in his country. Once again, it was a very full agenda and the exchange of updated information on franchising around the world was very valuable.


L-R: Mr Abdul Malik Abdullah, Chairman, Malaysian Franchise Association (Chairman Elect of the WFC); Mr Raja Habre, General Manager, Lebanese Franchise Association; Mr Charles Arbid, President, Lebanese Franchise Association (Chairman of the  WFC); Mr Graham Billings, Executive Director, FANZ; Mr David Foster, Chairman, FANZ