expert advice: Seva Surmei | Principal in the Transactions Team | DMAW Lawyers
Landmark Review: The Future Of Franchising In Australia
Australia’s franchising industry has reached a pivotal moment. As the sun sets on the current Franchising Code of Conduct and the Commonwealth Government prepares to deliver the findings from a comprehensive review of the Code, one thing is for certain: the industry has an opportunity to take stock of the past, examine the present and shape its future. With the Code’s expiration nearing in April 2025, this review is more than just routine maintenance; it’s a crucial examination of the practical implementation and limitations for franchisees, franchisors and suppliers across the system. 24 business franchise MAGAZINE
Under the spotlight Specifically, the review is seeking to address the impact of recent changes to the Code including: • The general fitness for purpose of the Franchising Code (noting the existing Franchising Code is set to sunset on April 1, 2025 and action to extend the Code is required). • The role of the Australian Competition and Consumer Commission and the Australian Small Business and Family Enterprise Ombudsmen in supporting enforcement and dispute resolution under the franchising regulatory framework. • The role of the Franchising Code in regulating the automotive sector, including selected protections exclusive to dealerships and the effectiveness of reforms in 2020 and 2021.
• The impact of 2022 reforms which increased certain penalties available under the Code, including some up to $10 million, and introduced the Franchise Disclosure Register. (Source: Small and Family Business Division, Treasury, Commonwealth Government)
The review, led by Dr Michael Schaper, has brought together four separate reviews into one process to allow effective consideration of varying factors and reduce duplication for key stakeholders. By the end of December this year, existing and potential franchisees can expect an outline of adjustments to business practices and the adaptation of new laws that may come into effect over the next 12 months and propel the industry into its next era. In the meantime, franchisees and franchisors must ensure they comply with recent updates and amendments to the Code.
