The Federal Government has announced its intentions to improve the viability of the franchise sector by the end of 2014 with the aim of saving the sector $8.6 million in red tape.
The ‘Future of Franchising’ statement, released by the Government in early April, outlines plans to build on a review of the sector by Alan Wein last year and introduce penalties for breaches of the Franchise Code of Conduct to protect small business owners. The Government has settled on the policy direction for franchising in light of the Wein review and started work on legislative changes to improve the sector for its participants.
Minister for Small Business Bruce Billson said these changes will help cut red tape by clarifying and streamlining the Franchise Code of Conduct and removing unnecessary provisions.
“This red tape reduction for the Franchising Code will allow more opportunities for resources to be invested back into franchise systems to drive productivity, innovation and jobs,” Billson said in a press release. “The proposed changes strike the right balance between the needs of franchisors and franchisees and the unique nature of the relationship between the two.”
Billson said the Government is committed to:
• Ensuring franchisees and franchisors act in good faith in their dealings with each other.
• Introducing penalties for a breach of certain provisions of the Franchising Code, along with enhanced audit powers for the Australian Competition and Consumer Commission.
• Improving the transparency of marketing funds.
• Improving disclosure including short form, easy to understand information for prospective franchisees.
To ensure these changes are implemented in partnership with Australian franchisors and franchisees, the Government has released the exposure draft bill and regulations amending the Franchising Code of Conduct for stakeholder feedback. These documents are available at this Treasury website now and the consultation period ends on Wednesday April 30.