As you will read in the following pages in this first 2008 edition of Franchise Review, there is a lot happening in franchising right now.
In my years in industry advocacy and public affairs, I don't recall seeing a sector or organisation going through as much change – at least not without being in the midst of some sort of crisis.
The good news is there is no crisis in franchising – the sector and the FCA are both in good shape.
But they can both be better – and that is why change is happening.
Let's look at the list:
- Creation of the first Franchisee Forum, with election of Tony Melhem to the board with full voting rights. Appointment of Franchise Forum representatives in each State.
- Creation of the Supplier Forum, headed by Victorian State President Phil Blain with representatives in each State.
- Appointment of new director Rod Wakefield to champion revitalisation of education services in the sector.
- Appointment of new director Diana Williams, to champion the Women in Franchising Forum (with the help of new Women in Franchising Chair Vicky Prout).
- Appointment of Julia Camm to create a reinvigorated program for the franchising event of the year, the National Franchising Convention (NFC08).
- Major injection of new 'blood' in the FCA office.
I admit that when I was considering joining the FCA late last year, there was part of me that was a little sceptical about the sincerity of what I was hearing from Chairman John O'Brien and the FCA board.
It's taken me less than a month in the job to well and truly put those thoughts to bed.
The FCA Board is absolutely committed. The current program is significant and there is more to come. By the end of 2008, the FCA will be a very different looking organisation to that of last year.
Much of the change will be achieved through the work of an energetic and enthusiastic team at the FCA office, working with the State committees to get the best results for FCA members and the sector as a whole.
The sector reputation in Australasia has been challenged in recent times, with an ugly incident of alleged fraud in New Zealand. An article in BRW magazine highlighted allegations of low ethical standards in a well-known Australian consulting practice and inquiries into franchising have kicked off in Western Australia and South Australia. The FCA has addressed these issues head on and will continue to do so, by listening, accepting criticism and responding appropriately. Of course, baseless claims and unsupported accusations will be contested vigorously, but the FCA is intent on lifting its reputation with members, potential members and stakeholders in Government, the regulatory arena and the public. And that means acting with sincerity and integrity, with a willingness to hear all ll voices and embrace aparticipants in the sector. After all, we are truly a sector made up of interdependent interests and we all profit most when that fact is acknowledged and recognised in dealings between parties. Our main message to the WA and SA inquiries is that the introduction of separate State-based rules for franchising is unnecessary and potentially counter-productive. We have arguably the world's most robust national legislative /regulatory regime for franchising and it does not need to be supplemented by different rules which may do nothing more than add management complexity and compliance cost for the sector. On the other hand, if the inquiries produce ideas which will help franchisees and make sense for the sector as a whole we will support them. The FCA is also addressing another significant issue of great importance to franchisees in our submissions and representations to the Productivity Commission inquiry into retail tenancies. What we have said to the PC is that landlords who jack up rents by 30, 40 or even 50% in a single hit are just not playing fair. Unpleasant experience has told us that in some cases, especially in the big urban shopping centres, there is a misuse of what amounts to local monopoly power (inside the shopping centre). One system we referenced to the Commission had a February book of shopping centre rental agreement renewals in three States, with the asking increase less than 20% in only one of seven businesses. One of the seven was asked to accept a 40% hike. We can see some benefits in the landlords being asked to follow some of the examples in the franchisor-franchisee relationship, and so, we have suggested adoption of a voluntary code. A key aim of the code would be to try to ensure transparency of financial history to try to increase the prospects of a 'fair go' for renters at renewal or renegotiation time. It will not be a quick fix, but if we persist and can gather support from other stakeholders
2-Apr-2008