Today the government released an options paper, seeking comment on proposed amendments to the Franchising Code of Conduct. This is part of the government’s response to the report of the Parliamentary Joint Committee on Corporations and Financial Services inquiry into franchising (which the options paper states was tabled on 1 December 2009 – only a year out!) and follows earlier consultations on the issue.
The 16-page paper notes the four broad areas in need of regulatory reform that were identified by the Joint Committee’s report:
- “Issues impacting on franchisees in the event of franchisor failure (Recommendations 1 and 4).
- Establishment of a registration system for franchise businesses and collection of data on the franchising sector (Recommendation 2 and Recommendation 7).
- End of term arrangements (Recommendation 5).
- Insertion of a good faith clause into the Franchising Code (Recommendation 8).”
The paper provides background and brief discussion of each and then puts forward a series of questions for comment. In releasing the options paper, Emerson noted that the Government was “particularly interested in any potential change to the code that may affect costs and risks faced by franchisors and franchisees”
The closing date for comment is 10 July 2009