The Australian Competition and Consumer Commission Deputy Chair Dr Michael Schaper has noted a steady number of franchising complaints while addressing the Franchising Council of Australia annual national conference in Canberra on Sunday.
“The number of franchising complaints has remained relatively static over the last few years despite the growth of the sector. This is a testament to the successful education, engagement and outreach programme for franchisors, franchisees and potential franchisees, but there is more to do,” Dr Schaper said.
“And whilst complaints have remained about the same, education is increasing. Over 3,000 potential franchisees have completed the ACCC’s free online education programme run by Griffith University.”
The ACCC’s bi-annual report into the sector shows that in the last financial year the ACCC received more than 630 franchising complaints and over 220 enquiries relating to the Franchising Code of Conduct, general competition matters and consumer-related issues.
“With franchisees having an increasing awareness of their rights, it is becoming clear that a large proportion of complaints are a result of some franchisors failing to meet best practice.
“The ACCC continues to be concerned about some franchisors not providing documentation, engaging in misleading conduct or using inflated income claims to sell a franchise.”
“For example, the ACCC has issued a specific warning to potential franchisees with a non-English speaking background as a direct response to conduct observed in the cleaning and home service industry.”
Dr Schaper described the ACCC’s role as promoting a fair and compliant business environment which will allow franchises to thrive.
“This goal is best achieved through a combination of education and enforcement action.”
“The ACCC has administered the Franchising Code for 14 years and during that time it has become apparent that a small but persistent group of franchisors continue to wrongly represent that they are not franchise systems to avoid the obligations of the franchise code despite the many actions taken by the ACCC. There may be merit in considering stronger sanctions for breaches of the code.”