Walk the Talk
It turned out that the vocal critic had little to contribute. Beyond the opportunistic bluster and political rhetoric from the safety of the other side of the road he was not able to contribute anything of significance to the national debate in his unique opportunity for a brief dialogue with the most influential force in the country.
What's my point? Simply that yet another government review of franchising - the third this year - provides a very important opportunity for franchisees, and indeed all stakeholders with an informed view of the franchise sector and the appropriateness of its regulation, to participate in the debate.
The ink is barely dry on the Western Australian Inquiry (which handed down its report in April) and the South Australian inquiry (which handed down its report in May), but the third inquiry will be the most influential. It is a federal government inquiry - and the federal government controls the agenda for the federal Franchising Code of Conduct prescribed under the Trade Practices Act.
The Federal Parliaments' Joint Committee on Corporations and Financial Services has been given terms of reference which set out four areas to be examined:
- The nature of the franchising industry, including the rights of both franchisors and franchisees
- Whether an obligation for franchisors, franchisees and prospective franchisees to act in good faith should be explicitly incorporated into the Code (having regard to its presence as an element in the Trade Practices Act)
- The interaction between the Franchising Code and the Trade Practices Act on the issue of unconscionable conduct
- The operation of the dispute resolution provisions under the code
The peak sector body, the Franchise Council of Australia, and the Franchisees Association of Australia will of course make comprehensive submissions and the serial academic commentators on franchising, including this correspondent, will again seek to influence the debate. I nevertheless encourage franchisees to engage directly with the inquiry. Your experiences - both positive and negative - are highly significant and should be highly influential in guiding the inquiry's recommendations.
The franchise inquiries have come about because of real, or perceived, problems in the efficacy of the current regulatory regime. Franchisees with negative experiences have an obvious incentive to make a submission but franchisees with positive experiences, presumably the vast majority, should take this opportunity to make a submission also.
My March/April column in Franchising magazine noted the intemperate comments delivered by a member of the South Australian inquiry who remarked that "in a perfect world we would not have franchises at all because I think they are all nonsense".
While I am not suggesting that this is a generally held opinion it nevertheless represents a vocal minority. If regulatory reform is to be recommended it must be on the basis of experience and need and a full consideration of the consequences and not simply on the basis of rhetoric or isolated and idiosyncratic experiences.
The right to vote is one of our most precious traditions - albeit perhaps diminished by a financial penalty if not exercised. The right to participate in the law reform debate through making submissions to law reform bodies is just as important. You will not be fined if you don't contribute but the quality of the regulatory regime will be improved if you do.
Andrew Terry, Australian School of Business at UNSW and Special Counsel, Deacons advisory services.
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