Executive Director's message: Steve Wright
With both the West and South Australian Governments recently handing down their findings from separate inquiries into franchising, the AC CC making a final judgement regarding the ongoing case against Bakers Delight and the High Court Ketchell case due to commence soon, there's plenty to talk about this month.
Firstly, I would like to thank all the FCA members who have contributed to our 'High Court appeal fund' for the Ketchell case. Although we are confident the case will commence within the next couple of months, no date has yet been set. We will keep you informed.
The WA inquiry into franchising has delivered its final report with the verdict from Small Business Minister Margaret Quirk proclaiming the sector to be in "good health" with the added note that there was room for improvement.
Importantly, Ms Quirk indicated the issues raised in the report should be considered at the Federal level — not in state specific legislation. This we applaud. The news from the SA Inquiry, also now completed, is not as positive.
On the first reading of the report from the South Australia inquiry, its recommendations represent a major upheaval ( the sector — suggesting a rewrite of law on unconscionable conduct, good faith and fair dealings and upending the current court approach to goodwill. From this perspective, we are not sure the committee has really thought through the legal consequences of the proposed changes, or the impact they may have on investment in the sector.
The WA Inquiry, based on comparable submissions from similar parties, came to very different conclusions The more detailed, longer study in the Federal arena (2006) also did not come close to the conclusions in the SA report.
The FCA is making a detailed assessment of both the SA and WA reports and their implications, before presenting a formal response to both the State Governments and the Federal Government.
Recently, the Australian Competition and Consumer Commission (ACCC) released its findings after its long-running investigation into allegations made about Bakers Delight. The ACCC found no evidence of breaches of the Code of Conduct and decided to take no further action. The WA report said it was "unable to verify allegations made in many submissions", some of which related to Bakers Delight .
Given the substantial publicity surrounding this investigation the ACCC decided to make some comments about the case. It was interesting to note the remark of ACCC Chairman Graeme Samuel who said "it should not be assumed that where there is smoke there is always fire."
The key findings included:
- Bakers Delight did not engage in unconscionable conduct or breach the Franchising Code
- It was difficult to substantiate claims and in some cases information given was directly contradicted by documents and other evidence
- There was no evidence produced to or obtained by the ACCC that – in its view – evidenced widespread or systematic problems of compliance within the Bakers Delight franchise system.
This investigation again shows that systems and processes in place are working for the franchising sector.
On a sad note, I have to report our Membership Manager Emma-Kate Coggan is leaving us. Emma-Kate has been offered a great new role in another member based organisation – which is a major step up for her.
Her enthusiasm and inimitable style will be missed by us and many FCA members and other contacts here and overseas. However, as one door closes another one opens and we are pleased to announce the appointment of Vanaja Thomas to the role of FCA Membership Manager. Vanaja comes to us with a wealth of experience in the area of association membership having previously managed membership at the Australian Institute of Company Directors.
Finally, all members should by now have received membership renewal letters. I hope we can rely on your continued support in 2008 / 2009 – which is shaping as a critical year for franchising in Australia.
Best Wishes,
Steve Wright
This article appears courtesy of The Franchise Review - the Official Journal of the Franchise Council of Australia .
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