Government response to the Franchising Code of Conduct review

The ARA has welcomed the Federal Government’s response to the Independent Review of the Franchising Code of Conduct, which was undertaken last year. Many of the recommendations adopted by government were broadly inline with the ARA’s submission to the review last year, informed by consultation with our members.

In their response, the Government has agreed to, or agreed in-principle to, all 23 recommendations made by the review. The review found that the Code is generally fit for purpose and should extended beyond its sunset date, with some changes to improve its operation. It also found that non regulatory changes can be implemented to improve the broader operating environment through enhanced information and guidance on best practice. These recommendations are broadly aligned with the ARA’s submission in the review and align with the advocacy we have been undertaking in this area.

Some key recommendations agreed to include:

  • The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) will have greater powers for dispute resolution, with their existing Tax Concierge Service to expand to support access to low-cost legal advice on alternative dispute resolution matters.
  • ASBFEO will also be able to publicly name franchisors that fail to meaningfully participate in alternative dispute resolution.
  • The public visibility and usage of the Franchise Disclosure Register (the Register) will be enhanced.
  • Additional information should be included on the Register relating to dispute resolution and adverse actions brought by enforcement agencies.
  • Guidance and education materials will be developed to support and promote better franchise relationships. This will be developed by ASBFEO in consultation with the sector and the ACCC.
  • The Government will look at the feasibility of introducing a licensing regime. This will be done by establishing a Treasury Taskforce to conduct a comprehensive cost benefit analysis of introducing a licensing regime, so more work on this to come.

We remain concerned about the practical impacts of a licencing regime and will continue to advocate for a light-touch approach to the implementation of licensing requirements to minimise adverse operational impacts for franchisors and franchisees alike.

The Government will release an exposure draft of the new Code later this year for public consultation. The ARA will actively be involved in this conversation and will be providing members feedback to the exposure draft. The Government is intending for this to be operational from 1 April 2025.

SHARE THIS ARTICLE

FURTHER READING

MST Marquee – The impact of migration on retail

Retail businesses setting budgets and forecasting are understandably finding it difficult to navigate the uncertain economic conditions. Our research can help educate retailers about industry profitability benchmarks, wage growth and inventory levels, so that businesses can better prepare for the future.

Now more than ever

If business, and retail especially, must reflect the zeitgeist in order to remain relevant, then in this unique inflection point in history, the rights of Indigenous people must be incorporated

Retail Voice CEO Message: 8 May 2024

Achieving a unified voice for retail has been a compelling focus for our industry for many years. It is in the spirit of this endeavour that we are delighted to

Retail Voice CEO Message: 1 May 2024

Yesterday, the Australian Bureau of Statistics released retail trade data for March, with a modest increase of just 0.8% compared to the same month last year, despite being bolstered by

Retail Voice CEO Message: 24 April 2024

Tomorrow, we commemorate ANZAC Day, a National Day of Remembrance in Australia and New Zealand that acknowledges those who served and died in all wars, conflicts and peacemaking operations. Lest