FCA calls for support for new retail tenancy code

By Sarah Stowe | 06 Nov 2015 View comments

The Franchise Council of Australia is putting retail tenancy in the spotlight, supporting a Retail Tenancy Code of Conduct and asking the franchising industry to follow suit.

According to SmartCompany, the code follows complaints from retailers about the high cost of rent, and FCA director, Steve Wright, has announced that a voluntary Retail Tenancy Code of Conduct for tenants and landlords has been drafted.

Retailing issues that Wright considers often problematic for tenants include excessive rental increases, fit-out demands and the conditions of end of term arrangements.

In an email sent to Franchising, Wright said:

“Times have never been tougher — for tenants, and, in many cases, for landlords. Some recent examples have shown us that when times are tough, some operators can look to new ways to try to maximise their performance, regardless of the impact this may have on others, particularly tenants, or other tenants in the same shopping centre, in some cases.

In the past 18 months, the FCA has consistently highlighted to state and federal governments that this is an area needing focus. Some have listened. Victoria, Queensland and NSW have adopted harmonised disclosure regulations. We expect others to follow suit.

But this alone is not enough. The WA Government has announced a review of retail tenancy regulation. The FCA applauds this and will be pressing for change.

The change we will be seeking is to adopt the fair-play requirements, inherent in the Franchising Code of Conduct, to apply to behaviour in retail tenancy.

The ACCC and state government small business agencies openly acknowledge that there are many more complaints and disputes about tenancy issues than there are about franchising agreements. Many of these types of disputes occur between landlords and tenants who are also franchisees.

The FCA will be taking the issue up federally and with all state governments. A board sub-committee has been formed to direct the campaign. A draft Code has been created. In the coming months, the FCA will be seeking franchise system support for this initiative, as well as backing from other like-minded organisations and representative groups. We will be going to each state to enlist support.”