Regulations to boost transparency in the Franchising Code of Conduct (the Code) and increase the quality and timeliness of information provided to franchisees were tabled in Parliament today.
These changes follow the review by Graeme Matthews of the disclosure provisions of the Code. It focussed on improving the 'up-front' information provided to current and prospective franchisees. This review attracted more than 70 submissions.
The changes, decided upon through extensive industry consultation, will come into effect on 1 March 2008 allowing franchise systems time to incorporate the changes into their operations.
"This is a great step forward for small business," Small Business Minister Fran Bailey said today.
"Prospective franchisees will have greater access to better information before signing on the dotted line. This will assist people to make the right decisions before investing large sums of their money in a business. These changes will boost the long term sustainability of the industry."
The Code promotes success in franchising by requiring transparency and fairness in the relationships between both prospective franchisees and current franchisees, and their franchisors.
The mandatory Code is governed by the Trade Practices Act 1974 (TPA) which is administered by the Australian Competition and Consumer Commission (ACCC).
"These reforms will make for a more effective code; and where there has been illegal conduct against a franchisee under the Code, there will be no excuse for inaction by the ACCC," Fran Bailey said.
Fran Bailey also emphasised she was committed to further enhancements to the franchising industry.
"My door is always open to advocates for continuous improvement in the franchising industry. I will continue to consult with the franchising industry on how we can make a good industry even better," Fran Bailey said.
The Trade Practices (Industry Codes – Franchising) Amendment Regulations 2007 (No.1) [registration number F2007L02475] may be found on www.frli.gov.au.