A Parliamentary Inquiry into the Franchising Code was announced in late March 2018 (Inquiry). The Inquiry, which will focus on the operation and effectiveness of the Franchising Code, is being conducted by the Parliamentary Joint Committee on Corporations and Financial Services (Committee).
A report is due by 30 September 2018. The Committee will report on:
(a) the operation and effectiveness of the Franchising Code, including the disclosure document and information statement, and the Oil Code of Conduct (Oil Code), in ensuring full disclosure to potential franchisees of all information necessary to make a fully-informed decision when assessing whether to enter a franchise agreement, including information on:
(i) likely financial performance of a franchise and worse-case scenarios,
(ii) the contractual rights and obligations of all parties, including termination rights and geographical exclusivity,
(iii) the leasing arrangements and any limitations of the franchisee’s ability to enforce tenants’ rights, and
(iv) the expected running costs, including cost of goods required to be purchased through prescribed suppliers;
(b) the effectiveness of dispute resolution under the Franchising Code and the Oil Code;
(c) the impact of the Australian consumer law unfair contract provisions on new, renewed and terminated franchise agreements entered into since 12 November 2016, including whether changes to standard franchise agreements have resulted;
(d) whether the provisions of other mandatory industry codes of conduct, such as the Oil Code, contain advantages or disadvantages relevant to franchising relationships in comparison with terms of the Franchising Code;
(e) the adequacy and operation of termination provisions in the Franchising Code and the Oil Code;
(f) the imposition of restraints of trade on former franchisees following the termination of a franchise agreement;
(g) the enforcement of breaches of the Franchising Code and the Oil Code and other applicable laws, such as the Competition and Consumer Act 2010, and franchisors; and
(h) any related matter.
This Inquiry follows the 2013 review of the Franchising Code and the introduction of the new Franchising Code in 2015.
The Committee has called for public submissions by 4 May 2018. The Committee is encouraging interested parties to take advantage of the opportunity to make either public or confidential submissions.
Submissions can be made through the Committee's website.