The issue of unconscionable conduct was raised in the recent Government inquiry into the Australian franchise sector. Importantly, the Government decided not to introduce a new, separate definition of unconscionable conduct for the Franchising Code of Conduct.

The Government’s decision is in-line with previously stated views of the FCA, ACCC and the Law Council of Australia. In fact, the Expert Panel appointed by the Federal Government to assess whether examples of unconscionable conduct, or a statement of principles of what constitutes unconscionable conduct, should be incorporated into the Trade Practices Act determined there was no need.

The FCA has maintained the ACCC has more than enough power to adequately police the sector with the current regulations as they stand. And they are clearly exercising those powers. Recent prosecutions in AllPhones, Seal-A-Fridge and Chocolates4U cases are testimony to that fact.

The Government has announced a package of initiatives that will provide franchisees with more confidence. Operators sailing too close to the wind will find it even harder to survive if the Government proceeds with planned ACCC spot audits.

All FCA members are bound by the FCA members’ standards – designed to provide members with an authoritative guide on acceptable standards of conduct. If a member does not comply with the requirements of the members’ standards then investigation and disciplinary procedures are in place to handle the matter, with the possibility of expulsion and withdrawal of the ability to use the FCA member sign.

But we don’t stop there. The FCA approach is to promote the continuing improvement in standards across the board. To achieve this, education is critical.

The best way to avoid clashes between franchisors and franchisees is through education and this is exactly what the FCA’s Eyes Wide Open franchisee pre-education seminars are designed to do.

They provide potential franchisees with the opportunity to hear from all stakeholders in the franchise community – a franchisor, franchisee, advisor, FCA, Government and the ACCC. Franchisees tell their stories about how to succeed, franchisors explain their points of view – what priorities they have, what they look for in a franchisee – and Government and ACCC representatives talk about the resources available to franchisees to help them get started in and continue their business journey.

It is this open communication that enables attendees to leave the event with a very clear understanding of what they are about to embark on. This education is vital in ensuring happy and successful franchisees.

Steve Wright is executive director of the industry sector organisation, the Franchise Council of Australia.