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ChaPter 1: FCa maintains FoCus on member suPPort
ChaPter 1
FCA mAintAins FoCus on member suPPort
mary aldred | Ceo FRANChISE COuNCIL OF AuSTRALIA
About the Author
Mary Aldred commenced as the Chief Executive Officer of the Franchise Council of Australia in April 2018. Mary brings to the role extensive experience across government, industry and the corporate sectors as well as a very strong focus on membership engagement, stakeholder collaboration and effective advocacy. The Franchise Council of Australia (FCA) is the nation’s peak body for franchising, representing franchisees, franchisors and service providers to the sector. The FCA provides a strong voice for franchising and is focused on raising the awareness of the benefits of franchising and educating governments, regulators and key decision makers, as well as the broader community, on the important economic and social contribution that franchising makes within Australia. Membership of the FCA is voluntary, and open to any organisation or individual involved in the franchise sector, including franchisors, franchisees, and suppliers to the sector. The FCA strives to add value to the businesses of its members by advocating on their behalf, and by providing education, information and networking services and opportunities that support a prosperous and growing franchise sector. Franchising is a popular business model in Australia and makes a significant contribution to the national economy. There are approximately 1,344 franchise brands in Australia, providing employment for more than 598,000 people and contributing more than $184 billion annually to the national economy.
Supporting members, many of whom are small businesses, and to further underpin franchising as the preferred model for small business success is a priority for the Franchise Council of Australia.
the role of the FCA
The Franchise Council of Australia (FCA) is the peak body for the franchise sector in Australia and covers a range of organisations and individuals, including franchisors, franchisees, professional advisers and suppliers. The FCA is committed to building a strong franchising culture that upholds standards and looks to meeting compliance obligations as a minimum standard – always striving for best practice in the franchise relationship and business conduct.
When COVID-19 hit, franchised businesses were employing almost 600,000 Australians and contributing more than $184 billion to the national economy.
The varying business restrictions in place across Australia since early 2020 have created a tough economic climate and demanded adaptability, determination and innovation by all businesses and franchising stood out as one of the most robust business models.
We continue to remind all our stakeholders that in many instances both franchisors and franchisees are small businesses, subject to the same economic waves and regulatory burdens that make day to day operation and profitability a challenge, especially in dealing with COVID restrictions.
The FCA’s support for members and broader advocacy in the COVID pandemic has earned respect across business and politics, and we are seen to have taken a strong stand to support Australian small businesses.
The FCA continues to advocate strongly for franchising as the best model for small business, by promoting the needs and concerns of all small businesses, whether franchisors or franchisees, and by highlighting franchise network support for franchisees during COVID and on the path to recovery.
The FCA has engaged deeply at all levels of government both informally and formally in recent months, including: • facilitating COVID-safe business recovery by emphasising the specific assistance and regulatory changes needed by diverse business sectors • bringing bad commercial leasing practices and landlord misconduct to their attention and urging government intervention • reinforcing the need for fairness in application of operating rules across sectors • encouraging Federal Treasury and state governments to introduce or continue support for struggling businesses and workers facing unemployment • making submissions on specific issues to various state government small business departments on business restrictions, exemptions, customer registers and industrial relations
The core of our advocacy has been a concerted campaign of dialogue with members to test government policy and temporary regulatory changes, as well as to provide input on specific measures requested by members.
Instead of constantly responding to political or media ‘noise’, we now actively promote awareness of FCA at the centre of franchising in Australia and a source of commentary on the day-to-day issues that concern franchise businesses.
Moving forward, the will FCA continue to focus on three key priorities:
• supporting members with access to information, resources and support through the transition from Covid-19 lockdowns and trading restrictions to business reopening
• advocating and representing the interests of members to all levels of government on the issues, concerns and needs of our members and the small business sector
• and through the media, enhancing the standing and reputation of franchising as the preferred model for small-medium business success, including highlighting the resilience of franchise systems during the challenges of 2020.
Feedback from FCA members, supported by a high level of membership renewal and retention, is that they feel they have been supported, listened to and represented through access to information and resources, and government advocacy.
Informing, educating and celebrating members
Against the Covid backdrop, the FCA has also provided a dedicated program of education and information through a series of topical webinars, and the FCA’s regular program of state-based events has recommenced in 2021.
The annual National Franchise Convention, the largest and most comprehensive professional development event on the FCA’s annual calendar, is taking place this year in Melbourne on 23 & 24 August.
After more than 18 months of disruption due to COVID, this year’s NFC is themed ‘A new world. A new direction’ and is designed to share practical ideas and information to help achieve sustainable success in the dramatically transformed business landscape.
Across 2020 and 2021, we have been proud to honour our finalists and winners of the FCA Excellence in Franchising Awards. The FCA’s Excellence in Franchising Awards have a proud tradition of celebrating the outstanding achievements of the people and networks that make the sector so resilient and successful. The Award winners and finalists set the benchmark for franchising across Australia and the Awards are a wonderful opportunity to celebrate their success.
Franchising Code of Conduct reforms
As Australia’s peak industry association for the franchising sector, the FCA responded positively overall to the Franchising Code of Conduct reforms announced in June by the Federal Government.
Given the dramatic impacts of COVID on small businesses across Australia, the FCA was reassured by the Federal Government’s approach to introducing the changes in the context of today’s economic reality.
The past eighteen months has proved to be the most difficult economic environment Australian businesses have ever experienced. The FCA was wary of further business failures that may arise where there are rapid or overly punitive regulatory changes.
The government appears to have taken into account the significant reforms already introduced by the FCA in response to the issues raised through the 2018 parliamentary inquiry into the franchise code of conduct and subsequent taskforce.
The FCA consulted extensively with franchisor and franchisee members as part of the industry consultation process. This included the FCA’s Policy Advisory Committee, a group comprising franchisors, franchisees and advisers, and the FCA’s Franchisee Advisory Committee.
In addition, the FCA’s Legal Committee, representing the majority of specialist franchise lawyers in Australia, was asked to provide feedback on any potential excessive compliance costs or unintended consequences.
The Government consulted heavily with the FCA through development of the new regulations and is aware of not only the steps taken to introduce new measures to ensure compliance, but also the actively supportive role played by franchise networks and the FCA to deal with COVID-19 and assist franchises and small business through the challenges.
The FCA has worked hard to address the key themes that arose in the 2018 Parliamentary Inquiry: • On the need to better engage franchisees, the FCA made significant changes. The
FCA now has franchisees represented on its Board and has established a Franchisee
Advisory Committee that meets regularly to consult and proactively raise issues. • The FCA revised member standards and guidelines and, during Covid-19, established a pro bono legal assistance program for franchisees needing legal advice. • The FCA also prepared and published a Franchisee Guide for prospective franchisees, containing clear, detailed information on due diligence imperatives across business, finance, legal requirements.
However, the franchising sector has not unequivocally endorsed all the proposed regulatory changes.
Member input is important to the FCA, especially feedback on the key issues for our sector in implementation of specific aspects of the revised Franchise Code of Conduct.
Feedback from a section of our membership following release of the Code revisions is that there are particularly significant business implications of the policy on rebates.
To this end, the FCA is continuing to talk with the government on behalf of members impacted by the rebates policy to develop an evidence-based case of unintended outcomes.
The FCA hopes that by clearly demonstrating the detrimental economic and employment impact on those affected businesses, the government will consider a review of the rebates policy.
For the broader membership, the FCA proposes to implement a comprehensive education and information program including a series of workshops and online sessions on general compliance requirements for both franchisors and franchisees.
looking ahead
While the last 18-plus months have brought with them unprecedented challenges, many franchise systems have also seized the opportunity to innovate, pivot their offering and generate successful business outcomes.
Franchise networks reported further recovery in revenues in the first quarter of 2021 as positive sentiment strengthened, according to the Australian Franchise Business “Pulse Check” survey conducted by FRANdata and survey including responses from 113 Australian franchise systems covering 21,368 business outlets.
However, the continuing risk of further government lockdowns remains a key challenge, with 51% of survey respondents citing this as their main ongoing concern. Other challenges included franchisee recruitment (33%), compliance (32%), wellness of franchisees and staff (32%) and workplace relations issues (30%).
The FCA remains committed to supporting members to meet these challenges and more broadly to supporting the ongoing success of franchising and small business across Australia.
