Norton Rose News
Choosing an established or emerging franchise
19/06/2009 - A prospective franchisee in Australia today has a smorgasbord of opportunities. With very few exceptions each of Australia's 1100 franchise systems is in the market for franchisees. A range of factors; entry cost, industry sector, past experience, skill ...
Acquiring competitive franchise networks
19/05/2009 - The difficult economic conditions and the high numbers of franchise systems in Australia are likely to result in significant opportunities for franchise networks that are performing strongly to acquire a competitive network that is underperforming.In ...
FCA submission on consumer credit changes
18/05/2009 - The Franchise Council of Australia moved swiftly to ensure the Federal Government was aware of the industry position in relation to possible unintended consequences of the Federal Government's consultation paper ‘An Australian Consumer Law: Fair markets ...
Timely pricing reminder
15/05/2009 - As the retail market tightens and franchisees chase the consumer dollar more aggressively at store level two recent cases provide a timely reminder of the importance of ensuring that all advertisements and marketing initiatives comply with the Trade ...
Deacons Lawyers explain the importance of business continuity planning
14/05/2009 - Business continuity planning involves the identification of areas of risk and putting in place strategies to minimise the impact of these risks if they eventuate. In the current environment, a significant risk faced by most franchise networks is the ...
Deacons Lawyers explain franchisee insolvency
13/05/2009 - Although franchised businesses have a far stronger track record of riding through the tough times, the reality is that perhaps for the first time in many years franchisors will need to consider the solvency of some of their franchisees. The health of ...
Strength in diversity
7/02/2009 - A recent item in the Sydney Morning Herald records that "The Guolizhuang penis restaurant has expanded to five franchises after opening in Beijing three years ago" (Mary-Ann Tay, Waiter, my menu is a menagerie, July 25, 2008). Although a regular visitor ...
Is the Franchising Code of Conduct working for franchisees?
7/02/2009 - The purpose of the Franchising Code of Conduct as set out in clause 2 is to "regulate the conduct of participants in franchising towards other participants in franchising". There is a degree of political correctness in the stated purpose. It would be ...
A victory for common sense in High Court decision
9/01/2009 - The Australian franchise sector is celebrating the clarity and certainty provided by the High Court of Australia in its decision in Master of Education Services Pty Limited v Ketchell [2008] HCA 38 handed down on 27 August 2008. HCA 38 handed down on ...
Will the High Court appeal in Ketchell's case resolve frachise sector uncertainty?
19/11/2008 - Prior to the decision of the NSW Court of Appeal in Ketchell it had been assumed a breach of the Franchising Code of Conduct ("the Code") had no automatic consequences, but instead entitled a party to seek relief as appropriate under the Trade Practices ...
ACCC Compliance Audits – Be Prepared!
2/10/2008 - Based on recent meetings with the Federal government and the ACCC in relation to the current Federal inquiry into franchising it appears one of the more likely end outcomes will be increased powers to the ACCC. This is likely to include giving the ACCC ...
Good faith – start getting prepared!
2/10/2008 - They say legislation is like sausages – the closer you get to seeing how it is made, the less respect you have for the finished product. On the flip side you have the oft-criticised legal system. Yet the High Court deliberations in Masters of Education ...
1 July 2009 start date for new fair dismissal code for small business
2/10/2008 - On 18 September 2008, Workplace Minister Julia Gillard unveiled the Rudd Government’s proposed new unfair dismissal laws that will allow companies with less than 15 employees to terminate an employee’s employment after giving them one warning and time ...
Access to private equity funding for franchisors
1/10/2008 - The continued growth in the franchise sector has led to substantial interest by private equity firms looking to make strategic investments in businesses with high growth potential. A number of high profile franchise brands have attracted interest from ...
Walk the Talk
1/10/2008 - I recently had an interesting conversation on an interstate flight with a former federal policy officer whose duties had includedaccompanying a former prime minister on his early morning constitutionals. Quite properly he did not divulge any state secrets ...
The Same Business Test Gets Tougher
29/08/2008 - When acquiring a company that is conducting a business, purchasers should pay careful attention to the structure of the acquisition to ensure that any prior year losses of the business will be available.In this Federal Court case, Stone J upheld the ...
Withholding consent on transfers
29/08/2008 - A recent action commenced by the Australian Competition and Consumer Commission in the Federal Court against a franchisor, or legal franchisor, could potentially become a landmark case on the issue of withholding consent to the transfer of a franchised ...
FCA responds to WA & SA Inquiries
29/08/2008 - The Franchise Council of Australia has responded in detail to the thorough and quite extensive recommendation of the recent franchising inquiries in Western Australia and South Australia as a precursor to preparing its submission to the proposed Federal ...
First step in talking international – getting the terminology right!
29/08/2008 - Try this test next time you are talking to someone about international expansion. Get them to explain the difference between master franchising, area development and area representation. Often these concepts are used interchangeably in Australia, and ...
DEACONS: Welcome to the July issue of Franchising Focus.
28/07/2008 - Yet another franchising inquiry The Federal government has announced yet another inquiry into franchising, this time to be conducted by the Federal Government's Parliamentary Joint Committee on Corporations and Financial Services. The announcement ...
But what's the bottom line?
20/06/2008 - Investment in a franchise represents a significant commitment for a franchisee in terms of financial resources, time and effort. It is a decision which should not be taken lightly and requires careful consideration of a number of factors on which the ...
What is a franchisee acquiring: business system or business potential?
18/06/2008 - Andrew Terry Business format franchising is the standard franchise model today. The term itself eloquently expresses the concept and explains the reasons for its pre-eminence - the franchisor provides an entire business format and management system in ...
Determining the monetary threshold for unconscionability actions
18/06/2008 - Andrew Terry Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd [2008] FCAFC 60 concerned an allegation that Ford had engaged in unconscionable conduct in breach of s51AC TPA in terminating a dealer agreement (the claim was based on the ways ...
Owner's drawing and misleading wages claims
18/06/2008 - Andrew Terry Barcar Pty Ltd v Carpatsea Pty Ltd [2008] NSWSC 344 concerned allegedly misleading conduct by a franchisee in negotiations for a sale of three Subway stores in NSW Central Coast through:exclusion of wages paid to Managing Director /sole ...
"Direct supervision" provisions in franchise agreement upheld
18/06/2008 - Andrew Terry The interesting issue in Masterclass Enterprises Pty Ltd v Bedshed Franchises (WA) Pty Ltd [2008] WASC 67 is clearly set out at the start of the judgment of Newnes J: "This case raises a novel question as to the enforceability of a ...
Deacons - Preparing your business for sale
17/06/2008 - Marshall Bromwich If you are considering the sale of your franchise network (or any business), the importance of preparation cannot be overstated. There are a number of steps that a prospective vendor should undertake before the business is put on the ...
Franchising Code of Conduct Amendments
24/03/2008 - This executive summary of the amendments to the Franchising Code of Conduct was prepared for members of the Franchise Council of Australia by Stephen Giles, Partner, Deacons.1. BACKGROUND The Amendments to the Franchising Code of Conduct announced by ...
WA Franchise Inquiry Report
3/03/2008 - Prior to Christmas the WA Government announced an inquiry into franchised businesses, appointing former Dymocks franchisee Chris Bothams to head the inquiry. Public hearings have now been held, and it is possible to provide a general impression of likely ...
Subtle Wind Changes in Franchise Perceptions
3/03/2008 - The WA and SA inquiries into franchising are symptomatic of a broader wind change in franchising. Franchise systems need to be alive to the fact that public perceptions of franchising are no longer universally positive. Further; politicians, regulators, ...
Licensees of Foreign Systems Caught by Code Changes
3/03/2008 - The removal of the exemption from The Franchising Code of Conduct (Code) compliance for foreign franchise systems has unintended consequences for Australian franchisors who are in fact licensees or master franchisees of foreign franchise systems. By ...
Special Leave Granted in Ketchell, but …
3/03/2008 - The High Court of Australia has granted special leave to the franchisor in the case of Ketchell v Master of Education Services to appeal the Full Federal Court decision which has caused such consternation in the franchise sector. However the grant is ...
FCA gets torrid time at SA Franchise Inquiry
3/03/2008 - The Franchise Council of Australia contingent led by new FCA Executive Director Steve Wright and supported by Deacons partner Stephen Giles received a torrid time at the recent SA Franchise Inquiry. The Parliamentary Inquiry, which has greater status ...
Federal Labor reviews Code and good faith
3/03/2008 - It is understood that the Federal Government has commissioned preliminary work in relation to the inclusion of a statutory concept of good faith as a specific statutory obligation in the Code. The Government is examining whether such a concept would ...
Legal update: Further guidance on the meaning of "franchise agreement"
5/11/2007 - In October 2004, we included an article in the Deacons publication “Franchising Focus” regarding the case of Capital Networks Pty Ltd v au. Domain Administration Ltd (Capital Networks) which considered the meaning of “franchise agreement” under the Franchising ...
Three great reasons to review your franchise documentation and processes
14/09/2007 - Economic prosperity, a forthcoming federal election and the recently announced changes to the Franchising Code of Conduct have motivated several of our franchisor clients to conduct a broader review of their documentation and processes. This makes a ...
Bad debts – practical tips to help you manage franchisee bad debts
14/09/2007 - As you review the performance of your business for the past financial year, it is timely to review how you have managed your bad debts. Failing to manage franchisee bad debts can affect not only your cashflow, but the entire franchise system. Compliant ...
Defective or deficient: the operation of the implied term of reasonable fitness for purpose
14/09/2007 - State and Territory Sale of Goods Acts, as well as the Trade Practices Act (for consumer contracts and for those goods under $40,000) oblige vendors to supply goods reasonably fit for any purpose expressly or implied made known to the sector. The implied ...
Advertising puffery or misleading conduct?
14/09/2007 - The recent case of Bembridge v Just Spectacles Pty Ltd is another example of the dangers of using what some might call “advertising puffery”. In this case “advertising puffery” was described as “flamboyant statements, hyperbole, exaggerated rhetoric ...
Deacons thoughts on franchise regulation
20/08/2007 - Writing in The Australian's Entrepreneur feature of 30th March, Peter Switzer, its small business editor, is typically provocative: "Politicians seem to lack the resolve to protect franchisees, or maybe it has been over-cautious, penny pinching ...
Deacons explains how franchisors can be liable for faulty products
23/07/2007 - Franchisors can be liable for faulty product even if they are not the manufacturer or supplier. This is not well understood. Franchisors who distribute stock to franchisees or provide a list of approved products to franchisees need to exercise particular ...
The importance of critical mass
20/07/2007 - In the short-term, a small franchise network can prosper. However, prosperity will attract new, bigger and possibly better competitors to the market. Unless a franchise network achieves the critical mass to enable it to compete effectively, it is likely ...
Deacons franchise OH&S case study
11/07/2007 - Michael Hammond Partner – Deacons Across all Occupational Health and Safety jurisdictions in Australia the safety of a workplace primarily lies in the hands of the employer and controller of a workplace and plant and substances in that workplace. As ...
Developing the network expansion plan for your franchise
10/07/2007 - A prospective franchisor will need to carefully plan network expansion. Sites may have to be found and secured, premises built and outfitted, and franchisees recruited, vetted and trained. Without a clear and coordinated plan, this can be a logistical ...
Handling disputes within your franchise network
10/07/2007 - All franchise networks have disputes. Successful systems have effective processes to identify and deal with the disputes at an early stage before they escalate. Non-legal dispute resolution processes can, in many situations, be very effective. ...
How to continuously improve your franchise
10/07/2007 - Franchising is a journey not a destination. Successful franchise systems are continually re-inventing themselves, improving the services they provide to customers, and remaining abreast of changes in customer requirements. Franchisors will ...
Achieving system compliance for your franchise
10/07/2007 - Uniformity and consistency are part of the customer's expectation of a franchise and are important for the franchisee as well as the franchisor. As many franchisees are in fact corporations, the system and image obligations under the franchise should ...
Setting the fees when franchising
27/06/2007 - Franchise fees should not be set using rules of thumb or industry averages, although these averages may provide useful starting points for initial calculations. Ultimately, the fees should be set based on a detailed franchisor and franchisee profitability ...
Documenting the franchise relationship
27/06/2007 - As franchising is fundamentally governed by the terms agreed between the parties, the franchise agreement is the cornerstone of the franchise relationship. The franchise agreement describes the legal relationship between the franchisor and the franchisee ...
Protection of intellectual property when franchising
27/06/2007 - As franchising requires franchisees to pay the franchisor for the right to use the franchisor’s brand and intellectual property, it is critical that the brand and intellectual property are appropriately protected. The first thing a prospective franchisor ...
Issues to consider in the franchise arrangement
27/06/2007 - The purpose of the franchise agreement is to clearly set out the rights and responsibilities of the parties for the duration of the business relationship. This can be a difficult task, as circumstances may change and a wide range of factors could intervene. ...
Ongoing communication and support for franchisees
27/06/2007 - A franchisor must decide the nature and level of support to be provided, and develop sound communication processes. A franchisor will often provide services such as technical support, marketing and promotional advice, assistance with management ...
The two golden rules of franchising
27/06/2007 - The starting point for the feasibility study is the existing operations of the business, as there is much knowledge to be gained from past experiences with customers. By looking at existing customers, it is possible to gain valuable demographic and socio-economic ...
How to select partners/ franchisees for your business
27/06/2007 - Most franchisors rate franchise recruitment as the most critical decision in franchising. The length and interdependence of the franchise relationship will magnify the effect on the franchisor of a poor recruitment decision. A poor recruitment decision ...
Effective training and initial support of franchisees
27/06/2007 - It is important that franchisees are trained so that they can offer a consistent quality of service throughout the network. A franchisor must develop a training program and relevant materials, and allocate appropriate personnel to undertake the training. ...
Pre-contractual disclosures for franchises
27/06/2007 - There are certain legal formalities to be observed before an applicant can commit to acquiring a franchise. The Franchising Code of Conduct requires all franchisors to provide a disclosure document and certain other material to prospective ...
The franchisee’s perspective
26/06/2007 - From the franchisee’s perspective, there are numerous advantages in operating as part of a successful franchise network. A franchised business is a proven concept with a lower risk of failure; the franchisee will receive ongoing assistance from the franchisor; ...
The importance of planning when franchising
26/06/2007 - Like all successful business activities, establishing a franchise network requires careful and thorough planning. It also requires substantial motivation, commitment, patience and perseverance, as the following comment from Rod Young of Deacons Consulting ...
The franchising concept
26/06/2007 - The legal definition of a franchise agreement is contained in the Franchising Cody of Conduct, which now regulates franchising in Australia. In essence a franchise agreement in defined as an agreement where one party (the franchisor) provides to another ...
The phenomenal success of franchising
26/06/2007 - Franchising has been phenomenally successful throughout the world. It was described by Megatrends author John Naisbett as “the single most successful marketing technique ever”, while The E Myth author Michael Gerber commented that the success of business ...
Access to franchisee capital
26/06/2007 - One of the major benefits of a franchised system is the ability of the franchisor to use franchisee capital to expand the network. In a typical franchise relationship, it is the franchisee who pays the establishment and operational costs associated with ...
The risks of franchising
26/06/2007 - The franchise relationship differs considerably from other business relationships. Because of the longevity and the degree of interdependence it creates, it is probably the most complex relationship in the business world. Franchising is sometimes described ...
The key features of franchising
26/06/2007 - In a business format franchise the franchisor prescribes the operating format for the business, and takes responsibility for managing and developing the franchise network. The franchisee receives access to the franchisor’s system and brand., and the ...
Can you franchise your business?
26/06/2007 - Franchising is not a magic formula that guarantees business success. It is simply a method of carrying on business that can offer significant commercial advantages for franchisor and franchisee. Research studies have, not surprisingly, confirmed ...
All for one and one for all
4/07/2006 - The cooperative structure, as a business model, has been a feature of many of the most successful businesses in the world. The key question is whether the future will support the continued use of this business model or whether it will cease to exist ...
Deacons on how to fend off franchise failure
29/05/2006 - According to Deacons, Irish dramatist, Brendan Behan, once said: “There’s no such thing as bad publicity except your own obituary”. For this comfort, the franchise sector should be grateful. It reflects the current maturity and growing significance of ...
Deacons great awarded
25/05/2006 - Former Deacons partner and now Perth consultant, John Groppoli, has been awarded the Contribution to Franchising award at the recent WA Franchise Council of Australia Awards.Groppoli is chairman of the national franchise group Termi-mesh and sits on ...
Deacons and how franchises are battling rents and landlords
23/05/2006 - According to Deacons, the debate about voracious shopping centre landlords and disgruntled tenants has gone on for years, and I suspect it started when the first property owner allowed the first tenant onto his property back in feudal days. Tenants have ...
Deacons on international franchising
17/05/2006 - According to Deacons, the words of the unidentified US Army Major spoken of BenTre early in the Vietnam war – that “In order to save the town it became necessary to destroy it” – come to mind frequently in the dynamic and rapidly developing area of South ...
Deacons on franchise legislation
16/05/2006 - According to Deacons, Australia is a member of a small, but growing, club of nations which have embraced dedicated franchise regulation. Although there are massive differences in the nature, extent and content of regulation, each regulated jurisdiction ...
Deacons: Australian franchises’ high standards
15/05/2006 - According to Deacons, speaking at a Franchise Council of Australia Nation Convention several years ago, Australian chairman, Peter Ritchie, noted that McDonald’s Australian operations were the jewel in McDonald’s international crown, exceeding best practice ...
Deacons on franchising and academia
15/05/2006 - According to Andrew Terry, from Deacons, Horace Rumpole clearly expressed his opinion of academic legal research when he “applied a torn-off page of the Criminal Law Review to the electric fire and lit a small cigar” (John Mortimer, Rumpole a la Carte). ...
Deacons looks at franchise network expansion
4/05/2006 - Deacons recognises that the stunning success of franchising in Australia, and throughout the world, is a powerful testament to its proven credentials as an effective vehicle for business expansion. Australia, of course, has many viable and successful ...
The future of franchised travel
20/03/2006 - The rate of change that is sweeping business will put pressure on both franchised and non-franchised travel networks. With more change ahead, how does a travel franchise system face new trends? Rod Young, managing director of Deacons Consulting, explores ...
Bullet proof franchising
12/01/2006 - The first five years of the 21st Century are about as good as it gets for the broader business community and franchising in particular. Since the 2000 Olympics and the release of the first Lord of the Rings film, the Australian and New Zealand markets ...
Academic research in franchising
11/01/2006 - Horace Rumpole clearly expressed his opinion of academic legal research when he “applied a torn-off page of the Criminal Law Review to the electric fire and lit a small cigar” (John Mortimer, Rumpole a la Carte). Rumpole can possibly be excused his desecration ...
I have seen the future – and it’s franchised!
11/01/2006 - On returning to the US in 1919 following a visit to the Soviet Union, Lincoln Steffens, an American journalist, boldly declared, “I have seen the future, and it works”. The massive political and economic changes in Eastern Europe seven decades later ...
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