Franchise systems have more than six months to implement reforms aimed at boosting transparency in the Franchising Code of Conduct.
The Australian Financial Review reports today that the changes were first raised in 1999.
The AFR has quoted Frank Zumbo from the University of NSW – a member of the now disbanded federal government-backed Franchising Policy Council – who said removing an exemption from the code for foreign franchisors was a positive. So was fine-tuning of the disclosure rules, he said.
But the changes "merely tinker around the edges and fail to address issues that go to the heart of many franchising disputes involving allegedly unfair practices by franchisors".
Key changes to the code involve giving participants in franchising four months to prepare a marketing fund audit, instead of three months previously, and 14 days to disclose materially relevant facts, compared with 60 days previously.
"Prospective franchisees will have greater access to better information before signing on the dotted line," Small Business Minister, Fran Bailey, said in a statement.
"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," she said.
Bailey said her door was 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."
