Emerson falls short on franchising code of conduct: Zumbo
Minister for Small Business Craig Emerson’s response to the federal franchising recommendations made by a Parliamentary Committee in relation to the Franchising Code of Conduct has fallen well short of ehat’s needed to clean out rogue franchisers that prey on vulnerable franchisees, says a promiment law professor.
Emerson yesterday announced the government will strengthen the Franchising Code and Conduct and give greater powers to the ACCC to crack down on franchisers engaging in anit-competitive behaviour. Penalities of up to $1.1 million for corporations and $220,000 for individuals will apply to anyone engagine in unconscionable conduct or making false or misleading representations.
According to Emerson, the code will provide “enhanced protection for small business”.
However, Frank Zumbo, Associate Professor with the School and Business Law and Taxation at the University of NSW, believes that the Minister is only “tinkering around the edges” and has “failed to deal with the central problems facing the Australian franchising sector.”
Zumbo said the Minister has failed to implement 2 key recommendations relationg to good faith, and as a result, rogue franchisers will be able to get away with unethical behaviour.
“Good faith is integral to good franchising and it’s disappointing that the Minister has failed to recognise this link,” he said.
According to Emerson, the Government will establish an expert panel to consult with the franchising and retail tenancy representatives, small business organisations and the ACCC on the effectiveness of the new code.
Minister Craig Emerson’s response to the federal franchising recommendations made by a Parliamentary Committee in relation to the Franchising Code of Conduct has fallen well short of what’s needed to clean out rogue franchisers that prey on vulnerable franchisees, says a prominent law professor.
Emerson yesterday announced the Government will strengthen the Franchising Code and Conduct and give greater powers to the ACCC to crack down on franchisers engaging in anit-competitive behaviour. Penalities of up to $1.1 million for corporations and $220,000 for individuals will apply to anyone engaging in unconscionable conduct or making false or misleading representations.
According to Emerson, the code will provide “enhanced protection for small business”.
However, Frank Zumbo, Associate Professor with the School and Business Law and Taxation at the University of NSW, believes that the Minister is only “tinkering around the edges” and has “failed to deal with the central problems facing the Australian franchising sector.”
Zumbo said the Minister has failed to implement two key recommendations relating to good faith, and as a result, rogue franchisers will be able to get away with unethical behaviour.
“Good faith is integral to good franchising and it’s disappointing that the Minister has failed to recognise this link,” he said.
According to Emerson, the Government will establish an expert panel to consult with the franchising and retail tenancy representatives, small business organisations and the ACCC on the effectiveness of the new code.
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