Submissions for code review coming to a close

By Sarah Stowe | 29 Oct 2015 View comments

Submissions for the federal government’s review of the franchising code of conduct close on Friday, 15 February.

The review will consider all aspects of the code; however it will pay close attention to its most recent amendments, which were made in 2008 and 2010.

When the review was announced on 4 January Brendan O’Connor, Minister for Small Business said submissions from the franchising sector were welcomed.

According to the official review website, anyone can make a submission, and it can be of any length and deal with any aspect of the review.

Submissions can be made on behalf of a group of people or an organisation.

The National Franchise Coalition (NFC) has already placed its submission, and it addresses three key issues, reports StartUpSmart.

The organisation would like to see a specific definition of “good faith” included in the code, in the hope that this will eliminate “rogue” franchisors from the system, as well as penalties for such franchisors.

It also hopes to see the review touch on end of term agreements, as the organisation believes it will eliminate the practice of “churning.”

StartUpSmart explains that according to the NFC, "churning… is where franchisors terminate a franchise agreement because of perceived breaches, or refuse to renew a franchise agreement, and then move to take over the franchise or on-sell it without paying for the goodwill, and pay little or nothing for the franchisee’s fixtures and equipment.”

If you are interested in making a submission, click here.