The new Franchising Code of Conduct (FCC) regime commenced on 1 January 2015 with the aim of updating franchising laws in Australia, including assisting franchisees in positions of weaker bargaining power. 

The regime aimed to make franchise relationships more transparent; regulate franchisor and franchisee behaviour; and implement dispute resolution processes.

The Australian Competition and Consumer Commission (ACCC) has for some time expressed concerns with the process of enforcing these regulations and has made a formal submission to the Parliamentary Joint Committee into the operation and effectiveness of the FCC.

The focus of the submissions was on the need for appropriate and increased penalties for failing to comply with ACCC issued infringement notices or the FCC.

The submissions also advocate for the inclusion of clauses in standard contracts (such as franchise agreements) regarding the illegality of unfair terms and resulting penalties; and improvements to the disclosure requirements.

The Parliamentary Joint Committee will report on all 223 submissions received by it, including the ACCC’s, by 30 September 2018. If the recommendations in the ACCC’s submission are adopted, it would signal the implementation of more stringent regulations on franchisors.

For more information relating to franchising agreements and relationships, or for general commercial law advice, please contact:

Alasdair Woodford
Senior Associate
T: 03 5225 5217
E: awoodford@ha.legal

or

Vittoria De Stefano
Principal Lawyer
T: 03 5226 8520
E: vdestefano@ha.legal

This article was written with the assistance of Alex Gulli, Graduate Lawyer