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.
