Australian Franchising Code of Conduct
A Critical Analysis of Current Case Law
Peter Buberis
- 206 pages
- English
- ePUB (mobile friendly)
- Available on iOS & Android
Australian Franchising Code of Conduct
A Critical Analysis of Current Case Law
Peter Buberis
About This Book
The Franchising Code of Conduct (the Code) is a mandatory obligation for all systems operating in Australia, and takes a comprehensive approach to disclosure, relationship laws and dispute issues. Expert author and leading practitioner Peter Buberis takes a critical view of this regulatory framework, evaluating the threads that make up the Code that directs the franchising industry in Australia.
Including chapters on the areas of disclosure, good faith, and intellectual property, Buberis takes a comprehensive approach in exploring the Code's development through its consideration and enforcement by the Regulator and the courts. Looking at recent case law, the chapters indicate continuing points of concern about the Code, and give cognisance to a recent Parliamentary review which may enhance its operation if adopted.
For professionals in the franchising industry, and anyone looking to understand more about the Code that governs Australia's franchises, this is a comprehensive guide that engages and analyses this key piece of legislature.
Frequently asked questions
Information
Chapter 1
- Part 1: Introduction;
- Part 2: Disclosure requirements before entry into a franchise agreement;
- Part 3: Franchise agreements;
- Part 4 Resolving disputes.
- Annexure 1: Disclosure document for franchisee or prospective franchisee; and
- Annexure 2: Information statement for prospective franchisee.
- the provision of appropriate information by the franchisor to a franchisee, or prospective franchisee, to enable it to make an informed decision about the franchise opportunity;
- giving the opportunity to the prospective franchisee to seek appropriate advice within timeframes that are reasonable;
- providing temporal withdrawal rights before and after (cooling off) execution of a franchise agreement;
- regulating behaviour before and during the term of an agreement, and during any dispute period, through imposing a statutory duty of ‘good faith’;
- providing certain controls and guidance to apply to the relationship of the parties;
- mandating a mediation process as a necessary step before litigation or arbitration, but not as a restraint on the right to seek injunctive relief.
- Franchising Taskforce – Following the release of the Report and in accordance with its first recommendation an inter-agency Franchising Taskforce has been established to examine the feasibility and implementation of a number of the other recommendations in the Report. It follows that many of the recommendations in the Report are not clear recommendations for change but rather recommendations that the Taskforce further examine the issues and potential reforms.
- Industry associations – The Report comments that the Franchise Council of Australia does not provide a balanced representation of franchisor and franchisee views. Government should remain aware of the risk of franchisors capturing the policy and regulatory debate. Franchisees are urged to form a national association.
- Disclosure and registration – Improved disclosure of financial information and marketing fund expenditure was recommended. Registration was a matter deferred to the Franchising Taskforce to consider further.
- Transparency and accountability on third line forcing and supplier rebates – Further disclosure in relation to supplier rebates was recommended.
- Whistleblower protections – The Report recommended whistleblower protections apply to franchisees reporting franchisor breaches of the Franchise Code.
- Unfair contract terms laws – It was recommended the Franchising Taskforce consider introduction of civil penalties for including unfair contract terms in franchise agreements. Cooling off period – The cooling off period should be extended to 14 days and also apply to transfers, renewals and extensions. Further, if premises are leased and the lease is not provided until after the franchise agreement is entered into, the cooling off period should not commence until a copy of the lease is provided to the franchisee.
- Fair exit rights and goodwill – The Report recommends amendment to the Franchise Code's termination provisions including by providing further notice periods and giving franchisees termination rights in special circumstances. The Franchising Taskforce is to consider changes which would recognise franchisee goodwill.
- Collective action – The Report recommends introduction of a class exemption to anticompetitive conduct laws to make it lawful for franchisees to collectively bargain with their franchisor.
- Dispute resolution and arbitration – It is recommended that the option of binding arbitration be added to the dispute resolution procedures under the Franchising Code. This would not exclude court action.
- Enhancement and alignment of Industry codes – The Franchising Taskforce is invited to consider introducing further and increased penalties for breaches of the Franchise Code. Further, consideration should be given to introducing useful provisions from other industry codes.
- No churning and burning – The Report recommends the Australian Competition and Consumer Commission (ACCC) be permitted to intervene and prevent marketing and sale of franchises by franchisors with a track record of churning (repeated sale of a single franchise unit) and burning (opening sites which are unlikely to be viable) with a view to profiting from up-front franchise fees.
- Education and advice – Further measures for educating franchisees are recommended including having the ACCC develop a FranSmart website for franchisees.
- Financing and lending – The Report criticised irresponsible lending and borrowing in the franchise industry.
- Retail lease arrangements – The Franchising Taskforce was invited to review matters including disclosure to franchisees in relation to leases.