New franchise standards: FCA seeks comment

By Sarah Stowe | 20 Nov 2019 View comments

The Franchise Council of Australia plans a new set of member standards to help raise the bar across the franchising sector.

And it’s turning to its membership to give feedback on its proposals.

Mary Aldred, FCA CEO, told Inside Franchise Business “The FCA is committed to improving compliance and behaviour in the sector, and has initiated a new set of proposed member standards to help achieve these goals.”

The FCA seeks to reinforce the necessity for compliance with all laws and  Code of Conduct core obligations and the new standards include specific attention to matters such as:

  • Prohibition of misleading or deceptive conduct, especially pre-contractual, and prohibition of unfair contract terms
  • Franchisees to be required to obtain independent legal and financial advice prior to signing a franchise agreement

The industry body is undertaking an “extensive program of consultation” with its members on the draft of revised franchising standards and supporting set of guidelines, which Aldred said will “clarify existing obligations and provide a reference point for day to day operations of franchised businesses”.

“Importantly, the new guidelines will provide members with practical examples to draw from best practice franchise models,” she said.

FCA engaging with members

As part of the FCA’s commitment to transparency, there was a session at the 2019 National Franchise Convention dedicated to the draft standards.

The body is engaging its state chapter committees and CES groups across Australia as part of the feedback process.

“Further member consultation will take place prior to finalisation and introduction of the new standards and guidelines, with the FCA board reviewing the final draft at its December meeting,” said Aldred.

The planning and embedding of new member standards is part of the five-step strategy to deliver the council’s 2020 vision.