Posted by Elizabeth Gore-Jones
on 9 February 2024
Yesterday, Dr. Michael Schaper released the independent review of the Franchising Code of Conduct to the Australian government.
He recommended that the Code should be “remade” and should not be allowed to sunset in April 2025.
He did however recommend changes to existing provisions. He also recommended the government evaluate the possibility of licencing franchisees.
He recognised a desire to address persistent issues in the sector without necessarily imposing greater complexity or regulatory burden upon franchisors.
Some key recommendations that would be pleasing for franchisors include:
1. simplifying the disclosure documentation e.g., merging the disclosure document and key facts sheet
2. allowing existing franchisees on renewal to opt out of a disclosure and cooling-off requirement
3. simplifying the termination provisions for serious breaches
4. clarifying several provisions of the Code that are potentially inconsistent
The findings of the report can be found here.
Remember that this is an independent review of the Code and it is now open to the government to consider the recommendations. Notwithstanding, we can expect a new Franchising Code of Conduct before 1 April 2025.
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