Churning and burning: Committee report fires up franchising sector reform

by Belinda Breakspear Partner, and Matthew Mcmillan Partner, and Paul Mclachlan Strategic Adviser, and Jake Grant Special Counsel, and Hannah Fas Lawyer, McCullough Robertson
  • A Parliamentary inquiry has recommended numerous changes to the Franchising Code of Conduct.
  • The recommendations are designed to lift standards of behaviour across the industry and to rebuild public confidence in Australian franchising.
  • Stay tuned for updates, and ensure that your franchising documentation is up to scratch.

Cooking with fire on the pan

On 14 March 2019, the Parliamentary Joint Committee on Corporations and Financial Services (Committee) published the report, ‘Fairness in Franchising’ (Report), outlining the findings of its inquiry into the operation and effectiveness of the Franchising Code of Conduct (Franchising Code).

Burning issues uncovered

The Committee found that:

‘The current regulatory environment has manifestly failed to deter systemic poor conduct and exploitative behaviour and has entrenched the power imbalance.
…
The actions of certain franchisors have caused enormous reputational damage to the sector. This needs to be rectified for the benefit of the entire franchising industry. The proposed reforms outlined by the committee in this report are substantial, and many.’

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