FCA reveals six steps to boost sector
The Franchise Council of Australia is taking action in light of the current mainstream media criticism of the sector.
Six actions will be introduced progressively over the coming six months and these encompass member engagement, a national inquiry, a new grievance/referral system, awareness of regulatory framework, standards, and a 'world best' approach.
Bruce Billson, executive chairman of the Franchise Council of Australia, explained the steps in a statement.
“Collectively, these actions aim to support franchising and drive economic and entrepreneurial success,” he said.
The six steps to boosting the franchise sector
1. The FCA will acknowledge sector-wide concerns, learn how to do things better and address shortcomings.
"The FCA is stepping up member engagement and communication in 2018 and beyond. We will be keeping members and the wider franchising industry more frequently informed of issues as they arise as well as progress made in key reform/improvement areas.
"We will be inviting member discussion, comments and feedback in relation to these areas on a more regular basis. And we will be restructuring some of the FCA's core advisory and professional development services in accordance with changes mentioned below.
2. The FCA is calling for an independent national Inquiry into the utility, awareness and effective application of the Franchising Code of Conduct and associated fair dealings and dispute resolution mechanisms.
"Last week we asked the Australian Small Business and Family Enterprise Ombudsman to instigate such an inquiry.
"We asked that its purpose and scope include identifying any deficiencies or gaps in the current regulatory framework with the view to recommending any necessary regulatory-policy change, adjusting agency operations and instigating public education and awareness campaigns or industry-led initiatives, having considered a thorough assessment of the likely impacts.
"We believe the identification of any gaps or deficiencies, and some scrutiny of regulatory enforcement action, would be helpful and beneficial at this time, given the nature of the current regulatory framework.
"Let's identify the causal factors, including third party conduct by parties outside the franchise relationship, the role of the franchise business model and its contribution to business viability, and whether the comprehensive regulatory framework is 'fit for purpose', fully activated and enforced.
"In our view this kind of objective, balanced, informed and analytical inquiry can produce conclusions and recommendations that help to ensure Australia maintains its reputation as a leading economy in which to develop and deploy the franchise model of entrepreneurship.
3. Address grievances through a new advice and referral system for FCA members.
"The FCA will be establishing a new telephone/web-enabled support information service for members in May. It will provide access to a free avenue for advice on how to deal with a concern or grievance without stepping over into the role of the regulator.
"Where a legitimate concern warrants regulatory consideration or intervention, we will make the introduction to a clear contact point within the relevant agency. A leading, well respected franchising expert and business mediator will lead and oversee this initiative.
4: Improve awareness and use of Australia's franchise regulatory and safeguard system.
"Running in tandem with the grievance navigation and referral service will be the promotion of Australia's franchise regulatory and safeguard system.
"The aim here is to make the responsible authorities far more visible, known for their role and powers and more accountable for their performance and engagement. We also want to inform the sector about the 'who and hows' of the regulatory framework, to build understanding, encourage access, and provide a counter point to those who suggest that more regulation is the only solution.
5: Elevate franchising standards through a new rating and assessment model.
"The FCA will be instigating a new star or colour-band rating and assessment mechanism to advocate for and further enhance member standards.
"An opt-in member rating will be administered externally using an exemplar franchise system checklist, which will be developed closely with members and industry analysts.
"The new rating will be promoted widely to emphasise industry progression/innovation, what exemplary standards look like, and support prospective franchisee due-diligence.
6: Invite franchisors to share their stories, insights and experiences into how they are building world-class brands, business formats and systems.
"Successful franchisees are the foundation for our sector's sustainable success. The FCA is inviting the franchise community to share with others the things that we know and love about franchising.
"We need to tell and share our stories of franchise successes, highlight the comprehensive regulatory and dispute resolution framework, lift and acknowledge best practice amongst our membership and promote awareness and understanding of the franchise model of enterprise and why it significantly increases the prospects for small business success.
"We will promote these case studies through video, social media and advertising and other effective communication channels."