FCA and the importance of the National Franchise Convention

According to the Franchise Council of Australia , registration is now open for NFC05, the National Franchise Convention, being held in Canberra 9-11 October.

NFC05 is franchising’s opportunity to make powerful political ground at a time when serious threats to the sector exist and are looming. Parliament will be sitting, John Howard and Fran Bailey will be among the political heavy-hitters attending the convention, and it is essential that broad political attention be drawn to the burning issues, and their potential consequences, by a show of strength in numbers.

Already, the two identities most influential in Australian franchising’s future, along with senior representatives of the Office of Mediation and the ACCC have confirmed their attendance. Other leaders and leading lights of the major political parties and relevant ministries and bureaucracies/agencies have indicated their intention to attend with timing and roles being confirmed at the time of writing. The promptness and prose of responses suggests that a political spotlight is a given.

While more hardworking and valuable than ever in a practical sense, NFC05 has also been configured around forums and opportunities to inform these key decision makers – or as much, to correct misunderstandings and misinformation that have long been a plague to franchising.

What’s in it for you?

As an example, whether franchisor or franchisee, what would the introduction of payroll tax do to your network? All systems would suffer violent financial pain and some, especially those finding their feet, would come crashing down. Yet there are political/bureaucratic moves to deem franchise agreements to be employment agreements and therefore open the way for payroll tax. Politicians must be brought to understand the implications in terms of business collapse, unemployment, drain on community resources, loss of economic productivity and voter outrage. It is not, in fact, a legal matter or revenue gathering goldmine; it is a macro-economic issue impacting the livelihoods of more than 500,000 Australians and their dependents.

What happens to your system when, despite the fact that you have been painfully clear and have operated to the letter of the Code on disclosure of financials, an under-performing franchisee alleges unconscionable conduct – and wins? How easy does it become for a new franchisee to gain entry to your system and then cruise along, knowing that there is no risk to their personal investment? Politicians need to be aware that this state of affairs could crush an $80 billion economic powerhouse, and that unbelievably, it is actually happening.

What is the outcome when ‘organisations’ purporting to represent the interests of franchisees deliberately stir up dissent, develop class actions, operate outside the mediation provisions of the Code and ferociously attack? Franchisors face debilitating legal costs and major distraction while the network’s franchisees inevitably suffer a loss of focus on support and a brand dragged through the mud. At NFC05 a formal franchisee representation policy, professional membership offer and new range of services will be launched, under the political gaze. The point is that the FCA represents the interests of all associated with the franchising sector, fairly and impartially, and that franchisee-representative ‘organisations’ tend to be little more than cynical money and misery-making machines.

Imagine the impact of a raft of amendments to the Franchising Code of Conduct that turn compliance into so many shades of grey. This was Labor policy prior to the last election. Clearly the issues were not understood by the policy makers – and from various quarters, political pressure is still being applied for revisions to correct ‘unfairness’. It simply cannot be clear to those being influenced that the Code works well, disputation in Australia is among the lowest in the world, and that on current data, just two percent of franchisees will ever be involved before a court with their franchisor. The stability of the entire sector is at stake here and at NFC05 the FCA will focus political attention on the new Member Code of Conduct that voluntarily governs those grey areas that legally, are ungovernable under any legislated code.

What is your recourse when shopping centre management arbitrarily declines to renew a franchisee’s lease, raises their rent, or places a direct competitor directly across the concourse? As it stands, you have none and this is nothing short of outrageous. Where lies the balance in tenants having to report turnover, while shopping centre management has no duty to reveal rental and conditions applied to others? Franchisees might have invested their life savings in set-up and building their businesses, only to have rent increased to the point where they become untenable – and there is nothing that franchisee or franchisor can do about it. NFC05 will beam political and media attention on the ruthless unfairness of this situation and propose a range of viable (and very fair) remedies.

However, NFC05 is about far more than political issues. Visit the dedicated convention website and you will discover a wealth of opportunity, information and opportunities for contact that will be available in the tradition of these conventions – in fact better than ever.

This year the convention has not been designed by committee, but by senior staff of the FCA who every day field the enquiries of franchisors, franchisees, intending franchisees, consultants and suppliers. The learning and networking program has been put together by those who know through experience what members and those surrounding the sector most need and want. The result is a refreshing simplicity, relevant range of topics, depth of information and enhanced opportunity for personal contact. The website also enables you to see what Canberra and the ACT have to offer as destinations. If your children have never visited the national capital and Australian icons like the National War Memorial, this is the perfect opportunity.

The emphasis of this report has been on political issues because not all associated with the sector yet understand how drastic some of the current and forthcoming threats to their investments and livelihoods are. Given the choice, the FCA might have delayed a Canberra venue for several years, but there is no choice. The impact must be made now. The level of misunderstanding and misinformation must be challenged and corrected. The threats are too dire and too imminent for delay.

The FCA board is to be congratulated on its (courageous) decision to site the convention in Canberra during a sitting session of Parliament. We will have the ear of the Prime Minister, Small Business Minister, Opposition and Parliament. But it is up to us to provide the ‘Voice’, and that voice must be strong. Particularly in a political context, strength lies in numbers. Even if you are a franchising ‘old hand’ and feel you have been to quite enough conventions, it is essential to the future of franchising that the sector unites behind NFC05 through sheer physical presence.

Prime Minister John Howard and Small Business Minister Fran Bailey also are to be congratulated on the depth of their understanding of the importance of the franchising community to Australia’s prosperity and social stability. Given their interest, the other political powerhouse personalities are very likely to follow by example.

You’re the Voice of an $80 billion, often misunderstood and chronically under-appreciated social and economic driver of prosperity. And that must be understood by those influencing the growth of franchised business into the future. Please add your presence and your Voice. Every face in franchising will count.

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