The Franchising Code of Conduct is a mandatory industry code of conduct that has the force of law under the Competition and Consumer Act 2010 (the Act).
The Department of Innovation, Industry, Science and Research assists the Australian Government to develop the law on franchising matters. Further information on DIISR’s role is available on its website, www.innovation.gov.au.
In 2008, the federal Parliamentary Joint Committee on Corporations and Financial Services resolved to hold an inquiry into the Franchising Code of Conduct and related matters. The ACCC made a submission to the inquiry (no. 60). The joint committee tabled its report on 1 December 2008.
On 5 November 2009, the Government released its response to the joint committee's report, which outlined a number of proposed reforms to the code. The response also stated that the Government “supports the public release of broad ACCC data on trends of inquiries and complaints from small businesses and franchising businesses...” The ACCC will now release a report twice per year containing such data. These reports can be found here.
On 27 November 2009, the Government announced the establishment of an expert panel which would provide advice to the Government on some outstanding issues raised in the recent parliamentary inquiries into the code and the unconscionable conduct provisions of the Act.
On 3 March 2010, the Hon Dr Craig Emerson MP released the expert panel’s report, indicated the Government’s support of the panel’s findings and announced further proposed reforms (see media release and Dr Emerson's speech).
On 4 June 2010, Dr Emerson announced that amendments to the code would come into effect on 1 July 2010 (see media release).
Review of the code
On 4 January 2013 the Minister for Small Business, the Hon Brendan O’Connor, announced the commencement of a review of the Franchising Code of Conduct (Franchising Code), to be conducted by Mr Alan Wein. Details of the 2013 review are available on the Department of Industry, Innovation, Science, Research and Tertiary Education website.
Purpose
The code aims to regulate the conduct of participants in franchising towards each other and to ensure that they are sufficiently informed about a franchise before entering into it. The code also provides a cost-effective dispute resolution scheme for franchisees and franchisors.
Role of the ACCC
Our role is to promote compliance with the code by helping people understand their rights and obligations under the code and the Competition and Consumer Act. We do this by developing educational material such as guidelines, articles and fact sheets as well as by giving presentations through our outreach programs in each state and territory.
We are also responsible for investigating complaints and, where necessary, taking enforcement action against anyone who fails to comply with the code.
