VACC supports new Franchising Code

14 March 2019

The Parliamentary Joint Committee on Corporations and Financial Services has completed its inquiry into franchising in Australia, and its findings – published under the title Fairness in Franchising – was released today. It has been worth the wait.

The committee findings echo what VACC and its members have been saying – yelling from the rooftop – for years, the existing regulatory framework and Franchising Code of Conduct needs to change in order to truly protect franchisees against exploitation. 

One of the main aims of the inquiry was to address “systematic exploitation of some franchisees by a subset of franchisors and a regulatory framework that does not provide adequate protection against such practices”. In light of its findings, the committee has proposed substantial changes to the Franchising Code of Conduct and to the responsibilities and powers of the Australian Competition and Consumer Commission (ACCC).

Recommended regulatory changes address: disclosure, franchise registration, supplier rebates, whistleblower protections, unfair contract terms, cooling off periods, exit rights, collective action, dispute resolution, binding commercial arbitration, alignment of industry codes, churning, education, and leasing arrangements.

The recommendations are designed to lift standards and conduct across the industry and to rebuild confidence in franchising in Australia.

Acknowledging that its automotive business owner members face unique challenges, VACC has been calling for an automotive-specific Code of Conduct. At this time, a unique automotive code has not materialised. However, the Chamber is supportive of the Fairness in Franchising paper and wishes to refer members to Chapter 17, in which automotive is addressed specifically.

VACC is referenced several times in Fairness in Franchising and is confident that its advocacy work, conducted on behalf of its members, was acknowledged and seriously considered by the Parliamentary Joint Committee.

VACC will continue to work with the Committee to bring about a fair and reasonable outcome for all members.

Read the Parliamentary Joint Committee on Corporations and Financial Services paper Fairness in Franchising.