The Australian Association of Franchisees (AAF) has conducted a thorough examination of The Independent Review of the Franchising Code of Conduct, a pivotal evaluation preceding the Code's expiration in 2025. The outcomes of this review were officially presented in the Federal Parliament last Thursday and are accessible for public scrutiny at Treasury.gov.au.
The AAF wishes to express profound disappointment with the results of the Review. Despite extensive evidence submitted by both the Australian Competition and Consumer Commission (ACCC), as the regulatory body, and the AAF, representing franchisee interests, demonstrating the inadequacy of the current Franchising Code and the need for replacement.
Contrary to these contributions, the Review Chair concluded that the Code is generally suitable, potentially allowing for continued exploitation of franchisees by franchisors. This conclusion disregards significant evidence and a continuous stream of franchising scandals involving major names such as the Retail Food Group, Pizza Hut, 7 Eleven, Holden, Mercedes Benz, and potentially McDonalds. The Review's suggestion of 'nothing to see here' starkly contradicts the harsh realities faced by countless franchisees.
This stance overlooks alarming feedback from franchisees, who rated the Code's effectiveness at a mere 4.2 out of 10. In the past 12 months, 126 franchisees reported severe disputes with their franchisors, with only 12 of these cases effectively resolved. This data emphasises the critical need for a reevaluation of the Code to better protect franchisee interests.
While the Franchise Council of Australia (FCA) supports the current Code, citing alignment with global standards, the ACCC's acknowledgment of its ineffectiveness over 25 years echoes the AAF's push for comprehensive reform.
It is crucial to note that the Review's report is not binding on the government. The Minister has prudently reserved judgment at this stage. The AAF is seeking an audience with the Minister to present serious concerns regarding the Inquiry and its conclusions. Franchisees must mobilise and engage in grassroots campaigning with political figures across the spectrum to secure necessary reforms before the current Code expires. The AAF is prepared to lead this campaign, but success depends on the collective voice of our members.
We urge all franchisees to join us in this vital campaign to safeguard our businesses and secure a fair and equitable franchising environment.
For further information, please contact:
Australian Association of Franchisees (AAF)
03 9034 8633