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New measures to strengthen the franchising industry

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News

20 August 2020

The Government has released its response to the Fairness in Franchising report, which identified significant weakness in parts of the franchising sector.

Senator the Hon Michaelia Cash, Minister for Employment, Skills, Small and Family Business, and the Hon Michael Sukkar MP, Minister for Housing and Assistant Treasurer, have announced a plan to help ensure fairness and accountability for both franchisees and franchisors.

These reforms will be achieved through changes including:              

  • doubling the penalties that apply for breaches of the Franchising Code
  • strengthening dispute resolution options by introducing conciliation and voluntary binding arbitration
  • improving disclosure relating to supply arrangements, marketing funds, exit arrangements and significant capital expenditure
  • introducing a public register of franchisors to increase transparency in the sector
  • developing a franchising website to make it easier for both franchisors and franchisees to access information and support
  • prohibiting franchisors unilaterally imposing significant capital expenditure on franchisees during the term of an agreement

Minister Cash said the Government is committed to striking the right balance between franchisees and franchisors to ensure the success of the sector.

“The Government will strengthen the regulatory framework and restore confidence in the sector,” Minister Cash said.

“We are working to deliver reforms that are fair, effective and accountable in the interests of both franchisors and franchisees, while avoiding unnecessary red tape.”

The government will work closely with franchisors and franchisees to design and implement the reforms.

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Email: SmallBusinessFranchising@industry.gov.au