Millions in investment at risk if proposed WA Franchising Bill goes ahead, warns Franchise Council of Australia

The Franchise Council of Australia has been joined by major WA businesses in cautioning the State Government against proposed changes to franchising law, predicting that if the legislation passes, it will result in a significant loss of business investment in the state.

Franchise consultants at the FCA note that Quick Service Restaurant Holdings (QSR) has threatened to move its corporate headquarters east if the private member’s bill to change franchise agreement rules in WA becomes law.

Chief Executive Mark Lindsay explains that if the changes are ratified, QSR would be at a disadvantage against eastern state competitors who would not have to meet the extra compliance burdens.

The owner of Red Rooster, Chicken Treat and CHOOKS Fresh & Tasty, QSR currently employs 3,800 people in WA.

Franchise consultants at the FCA point out that QSR is not the only business expressing similar concerns.

Steve Wright, Executive Director of the FCA says that “WA represents a $10 Billion franchise sector. If this bill lands in WA, expect to see millions of dollars of future investment in small business heading off in other directions.”

The FCA recently held a franchising breakfast in Melbourne, attended by franchisors, franchisees and suppliers, where it was announced that the franchise advisory body would embark on a nationwide campaign to collect signatures at its educational forums opposing the WA bill.

In addition, the FCA has distributed a comprehensive submission to all WA MPs explaining the consequences of the proposed Franchising Bill 2010, and why it should not go ahead.

Mr Wright adds that "the FCA has also forwarded Government and Opposition copies of petitions against the good faith bill, first raised in SA in 2009 and now being promoted in WA; petitions containing hundreds of signatures, in about equal number split between franchisors, franchisees and suppliers."

Industry response to the bill might come as a surprise to some WA MPs, Mr Wright says, with many “lead up the garden path about the supposedly benign nature of the bill.”

With real WA businesses now making their sentiments known, he now hopes that more MPs will take the time to examine the details of the proposed bill and reassess their position.

“It is an abuse of process to consider that a private members bill of a highly technical nature could be shoved though Parliament without any serious assessment of its potential impact,” Mr Wright cautions.