“The franchising sector is an important part of the Australian economy, but one that must improve its image to continue to grow,” the chairman of the Australian Competition and Consumer Commission Rod Sims said today at the Franchising Council of Australia national convention.
“The ACCC will be doing more in the future to ensure compliance, helping the sector to improve its standing,” Mr Sims said.
“Franchising offers many opportunities to entrepreneurs, young and old, but also many obstacles. The power imbalance in the franchise relationship too often leads to conflict, which is why the ACCC polices the franchising code of conduct.”
Mr Sims said the ACCC will use new investigation powers to ensure that the regulatory regime promotes confidence in the franchising sector.
“The ACCC will continue to enforce the code of conduct and these new powers will allow the ACCC to do more, earlier, to support best practice in the industry.”
Also addressing the FCA National Conference in Melbourne, ACCC deputy chairman Michael Schaper outlined how the ACCC has begun applying new powers to increase transparency and disclosure.
The new powers under the Competition and Consumer Act 2010 allow for the ACCC to monitor compliance and seek the disclosure of documents that franchisors must provide under the Franchise Code of Conduct. The ACCC can also investigate alleged breaches, giving franchisees the ability to complain without fear of reprisal.
“These new powers are designed to reassure potential entrants and existing franchisees that they will be provided with appropriate information from their franchisor throughout their contract,” Dr Schaper said.
“The ACCC will monitor compliance where there is a significant imbalance in bargaining power between industry participants. These new powers will put franchisors on notice to abide by the code of conduct and keep their records in order.”
“By ensuring that franchisees are aware of their rights and can access dispute resolution services, the ACCC is playing its part to ensure the franchising sector in Australia strengthens its standing and continues to grow.”
