Government seeking feedback on franchising reform

By Nick Hall | 12 Nov 2019 View comments

After months of deliberation, the federal government is calling on the franchise community to provide feedback on the feasibility of proposed sector reform. A newly announced Regulation Impact Statement (RIS) draft has been unveiled, offering small businesses the opportunity to have their say.

The new RIS draft marks a significant step in the franchise sector’s ongoing journey. In the months since the Parliamentary Joint Committee’s Fairness in Franchising report was handed down, little has been done to enforce the report’s 71 recommendations.

The inquiry and proceeding report revealed a systematic lack of transparency and accountability in some franchise networks, prompting the government to take action.

In April, a dedicated franchising taskforce was established to help form the basis of the government’s response to the inquiry. According to Kate Carnell, Australian Small Business and Family Enterprise Ombudsman (ASBFEO), the RIS is the next step in regulatory reform.

“The release of the RIS gives the franchising sector the chance to create meaningful reform; it’s critical that small businesses in the franchising sector get involved in this consultation process to ensure their voice is heard,” Carnell said.

“It is essential we see effective and timely reform in the franchising sector that is squarely focussed on fairness and creating mutually beneficial business relationships.”

Regulatory Impact Statement reform

Carnell echoed the government’s sentiment, urging members of the franchise sector to provide feedback on the current operating and legislative regulations.

“The franchising sector is worth more than $180bn to the Australian economy and the 97,000 franchised businesses in Australia employ close to 600,000 people,” Carnell said.

“This is why it is important to strike the right balance between regulation and allowing small businesses to grow and prosper. There is a need for urgent action in reforming the franchising sector to create a level playing field for franchises and franchisors.”

The ASBFEO said it was critical that members of franchise community share their experiences and feedback, or risk further red tape and over-regulation at the hands of government legislators.

Speaking at the Franchise Council of Australia’s National Franchise Convention, Carnell said that a wealth of new changes are up for discussion.

“Government believes that they have no choice but to act, that’s where we sit now. The government does not believe that a status quo exists within this space,” she told delegates at the event.

Small businesses are encouraged to provide their feedback by making a submission online by December 6.