The Australian Small Business and Family Enterprise Ombudsman, Kate Carnell has called for regulatory reform in the franchising sector that encourages genuine cooperation between franchisors and franchisees and effectively punishes bad behaviour.
The Parliamentary Joint Committee report, Fairness in Franchising, highlighted a systemic lack of transparency and accountability in franchising and a breakdown in the operating relationship of many franchise models.
“One of the services we offer is assistance with franchising disputes, and we hear firsthand the issues that are affecting franchisees and franchisors every day”, Ms Carnell says.
“There is a need for urgent action in reforming the franchising sector to create a level playing field for franchises and franchisors.
“The franchising sector is worth more than $180 billion to the Australian economy and the 97,000 franchised businesses in Australia employ close to 600,000 people.
“This is why it is important to strike the right balance between regulation and allowing small businesses to grow and prosper.”
The federal government has opened the next stage of consultation on the future regulation of the sector and is seeking feedback on the draft Regulation Impact Statement (RIS) by 6 December 2019.
“The release of the RIS gives the franchising sector the chance to create meaningful reform; it’s critical that small businesses in the franchising sector get involved in this consultation process to ensure their voice is heard,” Ms Carnell says.
“Small businesses that want to have their say on the future of the franchising sector can access the RIS online and make a submission.
“It is essential we see effective and timely reform in the franchising sector that is squarely focussed on fairness and creating mutually beneficial business relationships.”