Footnotes

Executive summary

[1]        The committee notes that the ACCC described this power as 'being able to undertake risk based audits' and went on to clarify that this would entail examination of disclosure documents and other material being circulated by a franchisor, as well as speaking with franchisees to discern any pattern of conduct. See Mr Brian Cassidy, ACCC, Proof Committee Hansard, Melbourne, 5 November 2008, p. 99

 

Chapter 1 - Introduction

[1] http://www.aph.gov.au/senate/committee/corporations_ctte/franchising/submissions/sublist.htm

 

Chapter 2 - The franchise model

[1]        Trade Practices (Industry Codes – Franchising) Regulations 1998, pp. 9-10

[2]        Frazer, L et al. Franchising Australia 2008 Survey, Asia-Pacific Centre for Franchising Excellence, Griffith University, 2008, p. 2. Business format franchises are the most common form of franchise in Australia, describing franchises operating at retail level under a common trademark and prescribed operating systems. See Franchise Council of Australia, 'What is franchising?', FCA website, accessed on 6 November 2008 at http://www.franchise.org.au/content/?id=183

[3]        Frazer, L et al. Franchising Australia 2008 Survey, Asia-Pacific Centre for Franchising Excellence, Griffith University, 2008, p. 10. When car dealerships and franchised fuel outlets are included, turnover increases to $130 billion.

[4]        Frazer, L et al. Franchising Australia 2008 Survey, Asia-Pacific Centre for Franchising Excellence, Griffith University, 2008, p. 19. The survey was sponsored by the Franchise Council of Australia.

[5]        Trade Practices (Industry Codes – Franchising) Regulations 1998, p. 9

[6]        Dr Elizabeth Spencer, Submission 39, p. 7

[7]        Termination provisions in the event of franchisee breach are set out in Part 3 of the Code; see Trade Practices (Industry Codes – Franchising) Regulations 1998, p. 22

[8]        See for example Dr Elizabeth Spencer, Submission 39, pp. 4-13

 

Chapter 3 - Franchising in Australia

[1]        ACCC, Submission 60, p. 18

[2]        This particular survey has only been undertaken since 2005-06. Australian Bureau of Statistics, 8167.0 - Selected Characteristics of Australian Business, 2006-07, 'Business structure and arrangements', accessed on 17 November 2008 at: http://www.abs.gov.au/AUSSTATS/abs@.nsf/Latestproducts/8167.0Main%20Features22006-07?opendocument&tabname=Summary&prodno=8167.0&issue=2006-07&num=&view=

[3]        Gehrke, J. 'An Overview of the Franchise Sector of Australia', Franchise Advisory Centre, 2008, p. 5, included as an attachment in Franchise Advisory Centre, Submission 132

[4]        Frazer, L et al. Franchising Australia 2008 Survey, Asia-Pacific Centre for Franchising Excellence, Griffith University, 2008, p. 24

[5]        Australian Bureau of Statistics, 8167.0 - Selected Characteristics of Australian Business, 2006-07, 'Business structure and arrangements', accessed on 17 November 2008 at: http://www.abs.gov.au/AUSSTATS/abs@.nsf/Latestproducts/8167.0Main%20Features22006-07?opendocument&tabname=Summary&prodno=8167.0&issue=2006-07&num=&view= 

[6]        Frazer, L et al. Franchising Australia 2008 Survey, Asia-Pacific Centre for Franchising Excellence, Griffith University, 2008, p. 20

[7]        The mandatory Franchising Code of Conduct was first introduced in 1998.

[8]        Frazer, L et al. Franchising Australia 2008 Survey, Asia-Pacific Centre for Franchising Excellence, Griffith University, 2008, pp. 21-22

[9]        Ms Jenny Buchan, Submission 89, p. 9

[10]      Gehrke, J. 'An Overview of the Franchise Sector of Australia', Franchise Advisory Centre, 2008, p. 7, included as an attachment in Franchise Advisory Centre, Submission 132

[11]      Gehrke, J. 'An Overview of the Franchise Sector of Australia', Franchise Advisory Centre, 2008, p. 7, included as an attachment in Franchise Advisory Centre, Submission 132

[12]      Frazer, L et al. Franchising Australia 2008 Survey, Asia-Pacific Centre for Franchising Excellence, Griffith University, 2008, pp 32-33

[13]      Frazer, L et al. Franchising Australia 2008 Survey, Asia-Pacific Centre for Franchising Excellence, Griffith University, 2008, p. 35

[14]      Frazer, L et al. Franchising Australia 2008 Survey, Asia-Pacific Centre for Franchising Excellence, Griffith University, 2008, p. 23. The figures refer to the proportion of fixed term agreements, which were used by 94 cent of total respondents.

[15]      Frazer, L et al. Franchising Australia 2008 Survey, Asia-Pacific Centre for Franchising Excellence, Griffith University, 2008, p. 29. Total median start-up costs were reported to be $100,000.

[16]      Frazer, L et al. Franchising Australia 2008 Survey, Asia-Pacific Centre for Franchising Excellence, Griffith University, 2008, p. 22

[17]      Frazer, L et al. Franchising Australia 2008 Survey, Asia-Pacific Centre for Franchising Excellence, Griffith University, 2008, p. 37. It should be noted that non-renewal can be a decision by either the franchisor or franchisee.

[18]      Mr Greg Fisher, Proof Committee Hansard, Brisbane, 10 October 2008, p. 84

[19]      Franchising Australia 1998 Survey, p. 6; Frazer, L et al. Franchising Australia 2008 Survey, Asia-Pacific Centre for Franchising Excellence, Griffith University, 2008, p. 22

[20]      Mr Robert Gardini, Proof Committee Hansard, Sydney, 9 October 2008, pp 6-7

[21]      Frazer, L et al. Franchising Australia 2008 Survey, Asia-Pacific Centre for Franchising Excellence, Griffith University, 2008, p. 40

[22]      Frazer, L et al. Franchising Australia 2008 Survey, Asia-Pacific Centre for Franchising Excellence, Griffith University, 2008, p. 40

[23]      Frazer, L et al. Franchising Australia 2008 Survey, Asia-Pacific Centre for Franchising Excellence, Griffith University, 2008, p. 41

[24]      The International Franchise Association based in Washington DC also made a submission to the inquiry; see Submission 120.

[25]      ACCC, Submission 60, pp 5, 7-8

[26]      OMA website, accessed 20 November 2008 at: http://www.mediationadviser.com.au/

[27]      DIISR, Submission 137, p. 2

[28]      Franchise Council of Australia website, accessed 20 November 2008 at: http://www.franchise.org.au/content/?id=2,

[29]      Mr David Beddall, Proof Committee Hansard, Brisbane, 10 October 2008, pp. 22-23. See also FAAI website, accessed 20 November 2008 at: http://www.faai.com.au/

[30]      Trade Practices (Industry Codes – Franchising) Regulations 1998, pp. 15-16

[31]      This may be from a legal or business adviser, or accountant; Trade Practices (Industry Codes – Franchising) Regulations 1998, sections 6 to 11, pp. 13-15

[32]      Trade Practices (Industry Codes – Franchising) Regulations 1998, Annexure 1, from p. 27

[33]      Trade Practices (Industry Codes – Franchising) Regulations 1998, sections 13 to 23, pp. 16-23

[34]      Trade Practices (Industry Codes – Franchising) Regulations 1998, sections 24 to 31, pp. 24-26

[35]      ACCC, Submission 60, p. 5

[36]      ACCC, Submission 60, p. 11

[37]      Watts, K and Gordon, T. 'Recent case law on the remedies available under the Franchising Code', Australia and New Zealand Trade Practices Law Bulletin, Vol 24, No. 3, July 2008, pp. 34-35

[38]      Ketchell v Master of Education Services Pty Ltd [2007] NSWCA 161

[39]      Master Education Services Pty Limited v Ketchell [2008] HCA 38

[40]      Watts, K and Gordon, T. 'Recent case law on the remedies available under the Franchising Code', Australia and New Zealand Trade Practices Law Bulletin, Vol 24, No. 3, July 2008, p. 35; Hoy Mobile Pty Limited v Allphones Retail Pty Limited [2008] FCA 810. Contributing to the different reasoning in Hoy was a 2001 amendment to the Code - the introduction of Clause 6A - that postdated the agreement in dispute in the Ketchell case.

[41]      The Franchising Code of Conduct does not prescribe penalties or remedies for breaches of its provisions.

[42]      Watts, K and Gordon, T. 'Recent case law on the remedies available under the Franchising Code', Australia and New Zealand Trade Practices Law Bulletin, Vol 24, No. 3, July 2008, pp. 35-36

[43]      ACCC, The guide to the Oilcode for industry participants in the downstream petroleum industry, p. iii, accessed on 7 November 2008 at: http://www.accc.gov.au/content/item.phtml?itemId=771848&nodeId=fd100c294232594ec7b32c7bbb9ef606&fn=Guide%20to%20the%20Oilcode.pdf

[44]      Department of Resources, Energy and Tourism, 'Downstream Petroleum Legislation', DRET website, accessed on 7 November 2008 at: http://www.ret.gov.au/resources/fuels/petroleum_refining_and_retail/downstream_petroleum_legislation/Pages/DownstreamPetroleumLegislation.aspx  

[45]      Trade Practices (Industry Codes - Oilcode) Regulations 2006, section 3(1)

[46]      Trade Practices (Industry Codes - Oilcode) Regulations 2006, sections 44 and 45

[47]      ACCC, The guide to the Oilcode for industry participants in the downstream petroleum industry, pp. 20-22, accessed on 7 November 2008 at: http://www.accc.gov.au/content/item.phtml?itemId=771848&nodeId=fd100c294232594ec7b32c7bbb9ef606&fn=Guide%20to%20the%20Oilcode.pdf

[48]      ACCC, The guide to the horticulture code for growers and wholesale traders in the horticulture industry, p. iii, accessed on 7 November 2008 at: http://www.accc.gov.au/content/item.phtml?itemId=778037&nodeId=758ea14dc281f3340b110396c743a3c8&fn=Horticulture%20code%20guide.pdf

[49]      Trade Practices (Horticulture Code of Conduct) Regulations 2006, section 36

[50]      Mr Robert Gardini, Proof Committee Hansard, Sydney, 9 October 2008, p. 9

[51]      See for example Retail and Commercial Leases Act 1995 (SA)

[52]      This view was shared by the 2008 Western Australian government inquiry into franchising. See WA Small Business Development Corporation, Inquiry into the Operation of Franchise Businesses in Western Australia, April 2008, p.45

[53]      Trade Practices Act Review Committee, Report to the Minister for Business and Consumer Affairs, AGPS, Canberra, August 1976, chapter 5; Trade Practices Consultative Committee, Small Business and the Trade Practices Act, Vol 1, AGPS, Canberra, December 1979, chapter 11.

[54]      Trade Practices Act Review Committee, Report to the Minister for Business and Consumer Affairs, AGPS, Canberra, August 1976, pp. 36-38

[55]      Trade Practices Consultative Committee, Small Business and the Trade Practices Act, Vol 1, AGPS, Canberra, December 1979, pp. 102-110

[56]      Consultative Paper and Draft Franchise Agreements Bill, 1986, Part A, pp. 8-71

[57]      Second Exposure Drafts of the Franchise Agreements Bill 1986, Part A, p. 13 and Part B, p. 21

[58]      House of Representatives Standing Committee on Industry, Science and Technology, Small Business in Australia: Challenges, problems and opportunities, January 1990

[59]      House of Representatives Standing Committee on Industry, Science and Technology, Small Business in Australia: Challenges, problems and opportunities, January 1990, pp. 233-235

[60]      Franchising Code Administration Council Ltd, Franchising Code of Practice, 1 February 1993

[61]      House of Representatives Standing Committee on Industry, Science and Technology, Finding a balance: Towards fair trading in Australia, May 1997, p. 1

[62]      House of Representatives Standing Committee on Industry, Science and Technology, Finding a balance: Towards fair trading in Australia, May 1997, p. 120

[63]      House of Representatives Standing Committee on Industry, Science and Technology, Finding a balance: Towards fair trading in Australia, May 1997, p. 118

[64]      House of Representatives Standing Committee on Industry, Science and Technology, Finding a balance: Towards fair trading in Australia, May 1997, pp 157-182

[65]      Franchising Code Administration Council Ltd, Franchising Code of Practice, 1 February 1993

[66]      ACCC, 'Franchising Code of Conduct amendments', ACCC website, accessed on 13 November 2008 at: http://www.accc.gov.au/content/item.phtml?itemId=815467&nodeId=9c74905234475e10f491a278e2901a25&fn=Franchising%20Code%20of%20Conduct%20amendments.pdf

[67]      Australian government response to the review of the disclosure provisions of the Franchising Code of Conduct, February 2007, accessed on 13 November 2008 at: http://www.innovation.gov.au/Section/SmallBusiness/Documents/Response_to_Recommendations_(Final)06Feb0720070206091019.pdf

[68]      WA Small Business Development Corporation, Inquiry into the Operation of Franchise Businesses in Western Australia, April 2008, Executive Summary

[69]      SA Parliamentary Economic and Finance Committee, Franchises, May 2008, pp. 96-99

 

Chapter 4 - Pre-contractual arrangements

[1]        Trade Practices (Industry Codes – Franchising) Regulations 1998, pp. 9-10

[2]        Trade Practices (Industry Codes – Franchising) Regulations 1998, pp. 10-11

[3]        Professor Warren Pengilley, Proof Committee Hansard, Sydney, 9 October 2008, pp 55-56

[4]        Professor Warren Pengilley, Submission 27, p. 7

[5]        Professor Andrew Terry, Proof Committee Hansard, Sydney, 9 October 2008, p. 67

[6]        Motor Trades Association of Australia (MTAA), Submission 90, p. 14

[7]        Mr Hank Spier, Spier Consulting, Submission 151, p. 2

[8]        Mr Hank Spier, Spier Consulting, Submission 151, p. 2

[9]        Mr Dick Adams MP, Submission 154, p. 1

[10]      Mr Dick Adams MP, Submission 154, p. 5

[11]      Mr Andrew Robinson, Motor Traders Association of New South Wale (MTA), Proof Committee Hansard, Sydney, 9 October 2008, p. 87

[12]      Australian Marine Industries Federation Limited, Submission 158, p. 1

[13]      Mr Ron Bowden, Service Station Association Ltd, Proof Committee Hansard, Canberra, 17 October 2008, p. 26

[14]      Professor Andrew Terry, Proof Committee Hansard, Sydney, 9 October 2008, p. 67

[15]      Australian Retailers Association, Submission 135, p. 8

[16]      SCCA, Submission 115, p. 7

[17]      FCA, Submission 103, p. 4

[18]      Ms Suzanne Brown, Submission 84, p. 3

[19]      Dr Elizabeth Spencer, Proof Committee Hansard, Brisbane, 10 October 2008, p. 44

[20]      Professor Andrew Terry, Proof Committee Hansard, Sydney, 9 October 2008, pp 67-68

[21]      Professor Lorelle Frazer, Proof Committee Hansard, Brisbane, 10 October 2008, p. 5

[22]      POAAL, Submission 101, p. 6

[23]      http://www.accc.gov.au/content/index.phtml/itemId/6118

[24]      ACCC, Submission 60, pp 7-8

[25]      ACCC, Submission 60, p. 8

[26]      Mr Stephen Giles, FCA, Proof Committee Hansard, Melbourne, 5 November 2008, p. 23

[27]      Mr Steven Wright, FCA, Proof Committee Hansard, Melbourne, 5 November 2008, p. 45

[28]      See information available at http://www.franchiseacademy.org.au

[29]      Dr Michael Schaper, ACCC, Proof Committee Hansard, Melbourne, 5 November 2008, p. 98

[30]      Ms Jenny Buchan, Proof Committee Hansard, Sydney, 9 October 2008, p. 77

[31]      ARA, Submission 135, p. 8

[32]      Mr John O'Brien, FCA, Proof Committee Hansard, Melbourne, 5 November 2008, p. 35

[33]      SSCA, Submission 115, p. 7

[34]      Mr Graeme Samuel, ACCC, Proof Committee Hansard, Melbourne, 5 November 2008, p. 83

[35]      David Lieberman & Associates, Submission 31, p. 1

[36]      ARA, Submission 135, p. 11

[37]      Mr Richard Evans, ARA, Proof Committee Hansard, Melbourne, 5 November 2008, p. 9

[38]      Mr Gavin Butler, Submission 3, p. 3

[39]      Ms Deanne de Leeuw, Proof Committee Hansard, Canberra, 17 October 2008, p. 65

[40]      See Division 2.2, Clause 11(2) of the Trade Practice (Industry Codes—Franchising) Regulations 1998

[41]      Law Council of Australia, Trade Practices Committee, Business Law Section, Submission 141, p. 9

[42]      Churning is a practice in which a franchisor sells and re-sells a unit franchise, making a profit each time the business changes hands regardless of the profitability of the unit franchise.

[43]      Franchisees Association of Australia, Submission 51, p. 6

[44]      FCA, Submission 103, p. 3

[45]      Mr Tony Melhem, FCA, Proof Committee Hansard, Melbourne, 5 November 2008, p. 36

[46]      SCCA, Submission 115, p. 8

[47]      7-Eleven, Submission 105, p. 5

[48]      Ms Suzanne Brown, Submission 84, p. 4. For further examples, see Submission 32 and Submission 114.

[49]      Mr Scott Cooper, Submission 15, pp 10-11

[50]      See for example Mr Damien Hansen, Submission 1, pp. 1-3; Ms Samantha Gow, Submission 61, p. 5

[51]      Trade Practices (Industry Codes – Franchising) Regulations 1998, p. 21

[52]      POAAL, Submission 101, p. 6

[53]      Mr Howard Bellin, Submission 30, p. 1

[54]      Trade Practices (Industry Codes – Franchising) Regulations 1998, p. 19

[55]      SA Parliamentary Economic and Finance Committee, Franchises, May 2008, p. 83

[56]      Law Council of Australia, Trade Practices Committee, Business Law Section, Submission 141, pp 9-10

[57]      Franchising Code of Conduct, Annexure 1, 'Disclosure document for franchisee or prospective franchisee', section 9.1(j)

[58]      Law Council of Australia, Trade Practices Committee, Business Law Section, Submission 141, p. 10

[59]      George and Ruth Nimbalker, Submission 67, p. 8

[60]      Ms Sam Gow, Submission 61, p. 4

[61]      Name withheld, Submission 63, p. 7

[62]      Mr Terry Cowan, Submission 11, p. 2

[63]      Ms Jenny Buchan, Submission 89, p. 8

[64]      Law Council of Australia, Trade Practices Committee, Business Law Section, Submission 141, p. 10

[65]      FCA, Submission 103, p. 3

[66]      FCA, Submission 103, p. 4

[67]      ARA, Submission 135, p. 15

[68]      SA Parliamentary Economic and Finance Committee, Franchises, May 2008, p. 34

[69]      Franchisees Association of Australia, Submission 51, p. 7

[70]      Mr Scott Staunton, Australia Post, Proof Committee Hansard, Canberra, 17 October 2008, pp. 99-100

[71]      For example, FCA, Submission 103, p. 4

[72]      International Franchise Association, Submission 120, p. 1

[73]      International Franchise Association, Submission 120, p. 4

[74]      Mr Robert Gardini, Proof Committee Hansard, Melbourne, 9 October 2008, p. 4

[75]      Mr Graeme Samuel, ACCC, Proof Committee Hansard, Melbourne, 5 November 2008, p. 83

[76]      Professor Andrew Terry, Submission 91, p. 2

[77]      Name withheld, Submission 63, p. 8

 

Chapter 5 - Issues arising during franchise agreements

[1]        MTAA, Submission 90, p. 16

[2]        MTAA, Submission 90, p. 16

[3]        For example, see Dr Elizabeth Spencer, Submission 39, p. 42

[4]        Franchisees Association of Australia, Submission 51, p. 21

[5]        Lottery Agents Association of Victoria, Submission 45, p. 3

[6]        FCAI, Submission 155, p. 23

[7]        FCAI, Submission 155, p. 23

[8]        Ms Zali Steggall, on behalf of IndCorp Franchisees' Association of Australasia, Proof Committee Hansard, Brisbane, 10 October 2008, p. 74

[9]        Ms Zali Steggall, on behalf of IndCorp Franchisees Association of Australasia, Proof Committee Hansard, Brisbane, 10 October 2008, p. 80

[10]      Ms Zali Steggall, on behalf of IndCorp Franchisees Association of Australasia, Proof Committee Hansard, Brisbane, 10 October 2008, p. 80

[11]      Mr Geoffrey Cope, Fibrecare Group, Submission 144, pp 1-2

[12]      See for example Mr Ray Borradale, Submission 16, p. 8

[13]      Review of the Disclosure Provisions of the Franchising Code of Conduct (Matthews Review), Report to the Hon Fran Bailey MP, Minister for Small Business and Tourism, October 2006, p. 36

[14]      Mr Nick Bryden, Yum! Restaurants Australia, Proof Committee Hansard, Canberra, 17 October 2008, p. 75

[15]      The committee also heard of franchisees feeling compelled to sign detrimental contracts at renewal, because their substantial sunk costs meant that walking away from the business was not a realistic option. For example, see evidence from Mr Robert Gardini, on behalf of the MTAA, Proof Committee Hansard, Canberra, 17 October 2008, p. 25

[16]      For example, see Mr Scott Cooper, Submission 15, p.12 and Mr Ray Borradale, Submission 16, p. 29

[17]      Mr Brian Cassidy, ACCC, Proof Committee Hansard, Melbourne, 5 November 2008, p. 92

[18]      Kerrie Davies, Submission 64, p. 1

[19]      Name withheld, Submission 63, p. 6

[20]      Trade Practices (Industry Codes – Franchising) Regulations 1998, p. 18

 

Chapter 6 - The end of a franchise agreement

[1]        Trade Practices (Industry Codes – Franchising) Regulations 1998, from p. 22

[2]        Professor Lorelle Frazer, Proof Committee Hansard, Brisbane, 10 October 2008, p. 10

[3]        Mr Graeme Samuel, ACCC, Proof Committee Hansard, Melbourne, 5 November 2008, pp. 92-93. A discussion of the efficacy of disclosure documents and other pre-contractual issues is at Chapter 4.

[4]        Mr Tony Piccolo MP, Economic and Finance Committee, Parliament of South Australia, Proof Committee Hansard, Melbourne, 5 November 2008, p. 57

[5]        Mr Stephen Giles, FCA, Proof Committee Hansard, Melbourne, 5 November 2008, p. 36

[6]        Mr Stephen Giles, FCA, Proof Committee Hansard, Melbourne, 5 November 2008, p. 41

[7]        Motor Traders Association of Queensland, Submission 36, pp. 7-8

[8]        Small Business Development Corporation of WA, Submission 139, p. 5

[9]        ACCC, Submission 60, p. 27

[10]      Mr Paul Ramm, Australia Post, Proof Committee Hansard, Canberra, 17 October 2008, p. 100 Australia Post indicated that they purposefully refer to these payments as 'exit payments' rather than 'goodwill' payments.

[11]      Mr Warwick Konopacki, The Cheesecake Shop Pty Ltd, Proof Committee Hansard, Sydney,   9 October 2008, p. 14

[12]      Mr Tim Castle, CFAL, Proof Committee Hansard, Sydney, 9 October 2008, p. 37

[13]      CFAL, Submission 22, p. 8

[14]      The Hon. David Beddall, Franchisees Association of Australia, Proof Committee Hansard, Brisbane,   10 October 2008, p. 33

[15]      Mr Tim Castle, CFAL, Proof Committee Hansard, Sydney, 9 October 2008, p. 33

[16]      Mr Tim Castle, CFAL, Proof Committee Hansard, Sydney, 9 October 2008, p. 37

[17]      Mr Peter Speed, Shopping Centre Council of Australia, Proof Committee Hansard, Sydney, 9 October 2008, pp. 42-43

[18]      FCA, Supplementary Submission 6, p. 3, citing (1089) 91 ALR 251 at p. 257

[19]      Mr Tony Piccolo MP, Economic and Finance Committee, Parliament of South Australia, Proof Committee Hansard, Melbourne, 5 November 2008, p. 57

[20]      Mr Philip Maloney, McDonald's Australia Ltd, Proof Committee Hansard, Canberra, 17 October 2008, p. 39

[21]      Dr Elizabeth Spencer, Proof Committee Hansard, Brisbane, 10 October 2008, p. 43

[22]      Mr Tim Castle, CFAL, Proof Committee Hansard, Sydney, 9 October 2008, p. 34

[23]      CFAL, Submission 22, Attachment 1

[24]      CFAL, Submission 22, Attachment 1.

[25]      Mr Peter Speed, Shopping Centre Council of Australia, Proof Committee Hansard, Sydney, 9 October 2008, pp. 41-42

[26]      Mr David Meagher, The Cheesecake Shop Pty Ltd, Proof Committee Hansard, Sydney, 9 October 2008, p. 20

[27]      Mr Nick Bryden, YRA, Proof Committee Hansard, Canberra, 17 October 2008, p. 89

[28]      Trade Practices (Industry Codes – Franchising) Regulations 1998, p. 22

[29]      Peregrine Group of Companies, Submission 116, p. 4

[30]      Peregrine Group of Companies, Submission 116, p. 4. See SA Parliamentary Economic and Finance Committee, Franchises, May 2008, p. 70 (SA Report), which also considered that a statutory duty of good faith would operate to discourage arbitrary termination. The need for a statutory duty of good faith is discussed in Chapter 8.

[31]      7-Eleven, Submission 105, p. 2

[32]      Trade Practices (Industry Codes – Franchising) Regulations 1998, p. 23

[33]      Section 23(b); See for example, Ms Heather Shearer, Submission 79, p. 3; ACCC, Submission 60, p. 27

[34]      Mr Howard Bellin, Proof Committee Hansard, Melbourne, 5 November 2008, pp.72-73 

[35]      ACCC, Submission 60, p. 28

[36]      ACCC, Submission 60, p. 28

[37]      Notably Kleins and Quiznos

[38]      Trade Practices (Industry Codes – Franchising) Regulations 1998, Section 22(3), p. 23

[39]      See for example, YRA, Submission 118, p. 14

[40]      See for example Ms Sam Gow, Submission 61; Ms Sue Brown, Submission 84; Ms Dianne Grey, Submission 96; and Ms Cheryl Borradale, Submission 125

[41]      CFAL, Submission 22, p. 8

[42]      Professor Lorelle Frazer, Proof Committee Hansard, Brisbane, 10 October 2008, p. 11

[43]      Mr Anthony Conaghan, DLA Phillips Fox, Proof Committee Hansard, Brisbane, 10 October 2008, p. 51

[44]      Professor Lorelle Frazer, Proof Committee Hansard, Brisbane, 10 October 2008, p. 12

[45]      Spier Consulting, Submission 151, p.3

[46]      MTAA, Submission 90, p. 13. See also  Mr Andrew Robinson, Motor Traders Association of New South Wales, Proof Committee Hansard, Sydney, 9 October 2008, p. 94; Mr Robert Gardini, Proof Committee Hansard, Sydney, 9 October 2008.

[47]      Mr John O'Brien, FCA, Proof Committee Hansard, Melbourne, 5 November 2008, pp 32-33

[48]      Ms Jenny Buchan, Proof Committee Hansard, Sydney, 9 October 2008, p. 84

[49]      Mr Anthony Conaghan, DLA Phillips Fox, Proof Committee Hansard, Brisbane, 10 October 2008, p. 55. NB refers to SCCA's submission, clause 7.2.

[50]      Ms Deanne de Leeuw, Submission 114, p. 30

[51]      Franchise Alliance, Submission 48, p. 3

[52]      SCCA, Submission 115, p. 18

[53]      The Cheesecake Shop, Submission 136, pp 2-3

[54]      Mr Tim Castle, CFAL, Proof Committee Hansard, Sydney, 9 October 2008, pp 29-30

[55]      Mr Tim Castle, CFAL, Proof Committee Hansard, Sydney, 9 October 2008, p. 29

[56]      Mr Murray Stewart, Eagle Boys Dial-A-Pizza, Proof Committee Hansard, Brisbane, 10 October 2008, p. 69

[57]      Mr Peter Speed, SCCA, Proof Committee Hansard, Sydney, 9 October 2008, p. 44

[58]      DLA Phillips Fox, Submission 81, p. 9

[59]      Professor Andrew Terry, Proof Committee Hansard, Sydney, 9 October 2008, p. 71

[60]      National Retail Association, Submission 109, p. 6. See also McDonald's, Submission 142 , p. 6

[61]      See for example FCA, Submission 103, pp 11-12 and Supplementary Submission 2; Mr Andrew Foote, Submission 106, p. 10, The Cheesecake Shop, Submission 136, p. 2, YRA, Submission 118, p. 2. For retrospectivity and implications beyond the franchising sector, see for example, FCA, Supplementary Submission No 2, p. 5; Mr Nick Bryden, YRA, Proof Committee Hansard, Canberra, 17 October 2008, p. 89; Mr Milton Cockburn, SCCA, Proof Committee Hansard, Sydney, 9 October 2008, p. 47; Small Business Development Corporation of WA, Submission 139 p. 6

[62]      NRA, Submission 109, p. 5. See also McDonald's, Submission 142, p. 6

[63]      Mr David Meagher, The Cheesecake Shop, Proof Committee Hansard, Sydney, 9 October 2008, p. 17

[64]      See for example, Mr Gary Black, NRA, Proof Committee Hansard, Brisbane, 10 October 2008, pp 17-18

[65]      Mr Richard Evans, ARA, Proof Committee Hansard, Melbourne, 5 November 2008, p. 18

[66]      The Hon. David Beddall, FAA, Proof Committee Hansard, Brisbane, 10 October 2008, p. 33.

[67]      Mr Gary Black, NRA, Proof Committee Hansard, Brisbane, 10 October 2008, pp. 16-17.

[68]      Mr Tony Piccolo MP, Economics and Finance Committee, Parliament of South Australia, Proof Committee Hansard, Melbourne, 5 November 2008, p. 58.

[69]      Mr Tim Castle, CFAL, Proof Committee Hansard, Sydney, 9 October 2008, p. 36

[70]      CFAL, Supplementary Submission 6, p. 36

[71]      Mr Tim Castle, CFAL, Proof Committee Hansard, Sydney, 9 October 2008, p. 30

[72]      Mr Richard Evans, ARA, Proof Committee Hansard, Melbourne,   5 November 2008, p. 20

[73]      Ms Deanne de Leeuw, Submission 114, p. 29

[74]      See for example Mr Robert Gardini, Proof Committee Hansard, Sydney, 9 October 2008, p. 3; MTAA Submission 90, p. 6. But see McDonald's Australia Limited, Submission 142, p. 6 for concern about good faith applying to renewal negotiations.

[75]      CFAL, Supplementary Submission 6, p. 44

[76]      SA Report, p.69

[77]      SA Report, p. 75

[78]      WA Small Business and Development Corporation, Inquiry into the Operation of Franchise Businesses in Western Australia, April 2008, pp 21-22 (WA Report)

[79]      WA Report, p. 24

[80]      WA Report p. iv.  See also ARA, Submission 135, pp. 15-16

 

Chapter 7 - Dispute resolution in franchising

[1]        Professor Lorelle Frazer, Proof Committee Hansard, Brisbane, 10 October 2008, p. 3

[2]        POAAL, Submission 101, p. 9

[3]        Mr Leicester Ramsey, Submission 56, p. 4

[4]        Mr Graeme Samuel, ACCC, Proof Committee Hansard, Melbourne, 5 November 2008, p. 84

[5]        See Part 4 of the Franchising Code of Conduct

[6]        Franchising Code of Conduct, section 29(3)(b)

[7]        Note that the Franchising Code of Conduct does not formally provide for binding settlements. A mediation process may or may not lead to a mutually agreed outcome, and the Code does not include a process for enforcing agreements reached at mediation.

[8]        Department of Innovation, Industry, Science and Research, Submission 137, p. 3

[9]        Ms Sue Weston, Department of Innovation, Industry, Science and Research, Proof Committee Hansard, Canberra, 17 October 2008, pp. 13-14

[10]      Department of Innovation, Industry, Science and Research, Submission 137, p. 3

[11]      Department of Innovation, Industry, Science and Research, Submission 137, p. 4

[12]      Mr Scott Cooper, Submission 15, p. 15

[13]      POAAL, Submission 101, p. 9

[14]      LAAV, Submission 45, p. 3

[15]      ACCC, Submission 60, p. 22

[16]      Ms Jenny Buchan, Submission 89, p.7

[17]      FCA, Submission 103, p. 6

[18]      Mr Gavin Butler, Submission 3, pp. 1-2

[19]      Name withheld, Submission 7, p. 1

[20]      Ms Nicole Hoy, Submission 8, pp. 1-2

[21]      Mr Ray Borradale, Submission 16, p. 7

[22]      Mr Ray Borradale, Submission 16, p. 20

[23]      George and Ruth Nimbalker, Submission 67, p. 4

[24]      Mr Peter Moon, Submission 93, p. 1

[25]      Law Institute of Victoria, Submission 159, p. 2

[26]      Fibrecare Group, Submission 144, p. 9

[27]      7-Eleven, Submission 105, pp. 4-5

[28]      Mr Hank Spier, Spier Consulting, Submission 151, p. 3

[29]      Mr Robert Gardini, Proof Committee Hansard, Sydney, 9 October 2008, p. 9

[30]      Mr Robert Gardini Proof Committee Hansard, Sydney, 9 October 2008, p. 9

[31]      Mr Leicester Ramsey, Submission 56, p. 4

[32]      Mr Damien Hansen, Submission 1, p. 4

[33]      Franchisees' Association of Australia, Submission 51, p. 18

[34]      ACCC, Submission 60, p. 20

[35]      Mr Robert Gardini, Submission 92, p. 3

[36]      John Levingston, 'Franchise mediations: Experience, problems and solutions (reflections of a franchise mediator), (2008) 19 ADRJ 83, p. 91

[37]      John Levingston, 'Franchise mediations: Experience, problems and solutions (reflections of a franchise mediator), (2008) 19 ADRJ 83, pp. 91-92

[38]      Mr Robert Gardini, Proof Committee Hansard, Sydney, 9 October 2008, pp. 3-4

[39]      Ms Deanne de Leeuw, Proof Committee Hansard, Canberra, 17 October 2008, p. 69

[40]      Mr Tim Castle, Competitive Foods Australia Pty Ltd, Proof Committee Hansard, Sydney, 9 October 2008, p. 36

[41]      In recommendation 7.2.18, 'The Committee recommends amending the Franchising Code of Conduct by inserting a provision imposing a duty to act in accordance with good faith and fair dealing by each party of the franchise relationship.' SA Parliamentary Economic and Finance Committee, Franchises, May 2008, p. 98

[42]      Mr Tony Piccolo MP, Economic and Finance Committee, Parliament of South Australia, Proof Committee Hansard, Melbourne, 5 November 2008, p. 60

[43]      David Lieberman & Associates, Submission 31, p. 2.

[44]      David Lieberman and Associates, Submission 31, p. 2

[45]      POAAL, Submission 101, p. 9

[46]      Professor Andrew Terry, Proof Committee Hansard, Sydney, 9 October 2008, p. 74

[47]      Professor Andrew Terry, Proof Committee Hansard, Sydney, 9 October 2008, p. 74

[48]      Ms Jenny Buchan, Proof Committee Hansard, Sydney, 9 October 2008, p. 82

[49]      Mr Brendan Bailey, Submission 152, p. 3

[50]      The Hon. Justice Garry Downes AM, 'Overview of Tribunals Scene Australia', Speech delivered to the International Tribunal Workshop, Canberra, 5 April 2006. http://www.aat.gov.au/SpeechesPapersAndResearch/speeches/downes/OverviewTribunalsSceneApril2006.htm , viewed on 17 November 2008

[51]      Mr Brendan Bailey, Submission 152, p. 3

[52]      Professor Andrew Terry, Proof Committee Hansard, Sydney, 9 October 2008, p. 74

[53]      SA Parliamentary Economic and Finance Committee, Franchises, May 2008, p. 98

[54]      See Terms of Reference for the Banking and Financial Services Industry Ombudsman at http://www.abio.org.au/abioweb/ABIOWebSite.nsf/0/B385C2D0F3E87335CA256C0E0045047A/$file/BFSO+Terms+Of+Reference+1-1-07.pdf , viewed on 17 November 2008

[55]      FCA, Submission 103, p. 6

[56]      Law Council of Australia, Trade Practices Committee, Business Law Section, Submission 141, p. 11

[57]      Mr Robert Gardini, Proof Committee Hansard, Sydney, 9 October 2008, p. 11

[58]      See 29(2) and 29(3) of Part 4 of the Trade Practice (Industry Codes—Franchising) Regulations 1998.

 

Chapter 8 - Good faith in franchising

[1]        Competitive Foods Australia Pty Ltd (CFAL), Submission 22, p. 6. See also Mr Michael Delaney, Motor Trades Association of Australia (MTAA), Proof Committee Hansard, Canberra, 17 October 2008, p. 19

[2]        Dr Elizabeth Spencer, Proof Committee Hansard, Brisbane, 10 October 2008, p. 38 and Submission 39, p. 5

[3]        CFAL, Submission 22, p. 7

[4]        A number of submissions raised the issue of churning (see for example Mr Gavin Butler, Submission 3, Mr Michael Sheridan, Submission 20, Ms Deanne de Leeuw, Submission 114). Following the 2006 Matthews Review, a number of amendments were made to the disclosure provisions of the Code. The amendments were introduced in March this year and were, in part, aimed at reducing churning. See the government response to the Matthews Report, February 2007.

[5]        Dr Elizabeth Spencer, Proof Committee Hansard, Brisbane, 10 October 2008, p. 39 and Submission 39, pp. 4-5. See also for example CFAL, Submission 22, pp. 7-8. In response to the Matthews Report, the government agreed to address the issue of unilateral variation through reform of section 51AC of the Trade Practices Act where such clauses (either in relation to terms or termination of the agreement) would be a factor that may indicate that a corporation has engaged in unconscionable conduct.

[6]        Dr Elizabeth Spencer, Proof Committee Hansard, Brisbane, 10 October 2008, p. 37

[7]        Dr Elizabeth Spencer, Submission 39, p. 29

[8]        Dr Elizabeth Spencer, Submission 39, p. 37. Dr Spencer's submission also outlines a range of overseas jurisdictions, both civil and common law, where good faith is incorporated, including the US Uniform Commercial Code, Restatement (Second) of Contracts, UNDROIT Principles of International Commercial Contracts, and the UN Convention on Contracts for the International Sale of Goods (CISG).

[9]        See for example, Mr Kim Rosenwald, Submission 44, p. 3, Mr Scott Cooper, Submission 15, p. 16, and Mr Howard Bellin, Proof Committee Hansard, Melbourne, 5 November 2008, p. 80.

[10]      SA Parliamentary Economic and Finance Committee, Franchises, May 2008 (SA Report), p. 55

[11]      Professor Andrew Terry,             Submission 91, p. 4

[12]      Professor Andrew Terry, Submission 91, p. 5

[13]      ACCC, Submission 60, p. 19

[14]      NRA, Submission 109, p. 10

[15]      DLA Phillips Fox, Submission 81, p. 4

[16]      Mr Graeme Samuel, ACCC, Proof Committee Hansard, Melbourne, 5 November 2008, pp. 95-96.

[17]      Law Society of Western Australia, Submission 58, p. 2

[18]      Ms Deanne de Leeuw, Submission 114, p. 5

[19]      See for example ACCC, Proof Committee Hansard, Melbourne, 5 November 2008, p. 83

[20]      MTAA, Submission 90, p. 6

[21]      MTAA, Submission 90, p. 6

[22]      Mr Greg Fisher, IndCorp Franchisees Association of Australasia, Proof Committee Hansard, Brisbane, 10 October 2008, p. 85

[23]      Mr Tony Piccolo MP, Economic and Finance Committee, Parliament of South Australia, Proof Committee Hansard, Melbourne, 5 November 2008, p. 58

[24]      Professor Andrew Terry, Proof Committee Hansard, Sydney, 9 October 2008, p. 76

[25]      Mr Peter Speed, SCCA, Proof Committee Hansard, Sydney, 9 October 2008, p. 49

[26]      Mr Scott Staunton, Australia Post, Proof Committee Hansard, Canberra, 17 October 2008, p. 99

[27]      Federal Chamber of Automotive Industries, Submission 155, p. 12

[28]      Law Council of Australia Trade Practices Committee, Business Law Section, Submission 141, p. 2

[29]      Law Council of Australia Trade Practices Committee, Business Law Section, Submission 141, p. 2

[30]      MTAA, Submission 90, p. 5

[31]      FCA, Submission 103, p. 17

[32]      Mr Stephen Giles, FCA, Proof Committee Hansard, Melbourne, 5 November 2008, p. 27

[33]      Associate Professor Zumbo, Submission 140, p. 39

[34]      Associate Professor Zumbo, Submission 140, p. 39

[35]      Mr Tony Piccolo MP, Economics and Finance Committee, Parliament of South Australia, Proof Committee Hansard, Melbourne, 5 November 2008, p. 58

[36]      MTAA, Submission 90, p. 7

[37]      FCA, Submission 103, p. 20

[38]      DLA Phillips Fox, Submission 81, p. 6

[39]      CFAL, Submission 22, p. 3

[40]      Motor Trades Association of Australia, Submission 90, p. 7

[41]      Mr Robert Gardini, Submission 92, p. 2

[42]      Mr Robert Gardini, Submission 92, p. 2

[43]      Motor Traders Association of NSW, Submission 99, pp. 11-12

[44]      FAA, Submission 51, p. 14

[45]      ACCC, Submission 60, p. 16. See also Shopping Centre Council of Australia, Submission 115, p. 11

[46]      Yum! Restaurants Australia, Submission 118, pp. 14-15

[47]      Ms Deanne de Leeuw, Submission 114, p. 17

[48]      Mrs Marie McGrath-Kerr, POOAL, Proof Committee Hansard, Melbourne, 5 November 2008, p. 46

[49]      Ms Jenny Buchan, Submission 89, p. 6

[50]      Professor Warren Pengilley, Submission 27, p. 21

[51]      Professor Warren Pengilley, Submission 27, p. 21, citing Texas Senate Bill s.18.06 (1971)

[52]      Professor Warren Pengilley, Submission 27, p. 7

[53]      FCA, Submission 103, p. 11

[54]      Motor Traders Association of NSW, Submission 99, p. 68

[55]      Professor Andrew Terry, Proof Committee Hansard, Sydney, 9 October 2008, p. 69

[56]      7-Eleven Stores, Submission 105, p. 4

[57]      CFAL, Submission 22, Attachment 1

[58]      CFAL, Submission 22, Attachment 1. The proposed new Part 3A Franchising in good faith also includes 23B and 23C which deal with renewal and non-renewal of franchise agreement. These issues are discussed in Chapter 6.

[59]      YRA, Submission 118, p. 7

[60]      YRA, Submission 118, p. 7

[61]      YRA, Submission 118, p. 7

[62]      FCA, Submission 103, pp. 18-19

[63]      Ms Jenny Buchan, Submission 89, p. 6

[64]      Ms Jenny Buchan, Proof Committee Hansard, Sydney, 9 October 2008, p. 83

[65]      Mr Robert Gardini, MTAA, Proof Committee Hansard, Canberra, 17 October 2008, p. 21

[66]      Mr Robert Gardini, MTAA, Proof Committee Hansard, Canberra, 17 October 2008, p. 22

[67]      See recommendations 7.2.13 and 7.2.14 on good faith and fair dealing of the report of the SA Report

[68]      CFAL, Submission 22, Attachment 4

 

Chapter 9 - Enforcement of the Franchising Code of Conduct

[1]        These remedies are found in section 80, section 82 and section 87 of the TPA.

[2]        ACCC, Submission 60, p. 5

[3]        Mr Graeme Samuel, Proof Committee Hansard, Melbourne, 5 November 2008, pp 81-82

[4]        Mr Graeme Samuel, Proof Committee Hansard, Melbourne, 5 November 2008, p. 82

[5]        Mr Graeme Samuel, Proof Committee Hansard, Melbourne, 5 November 2008, p. 85

[6]        Mr Graeme Samuel, Proof Committee Hansard, Melbourne, 5 November 2008, p. 82

[7]        Mr Graeme Samuel, Proof Committee Hansard, Melbourne, 5 November 2008, p. 82

[8]        Mr Graeme Samuel, Proof Committee Hansard, Melbourne, 5 November 2008, p. 83

[9]        ACCC, Submission 60, pp 29-32

[10]      ACCC, Submission 60, p. 13

[11]      Ms Sam Gow, Submission 61, p. 12; Mr Garry Clarke, Submission 119, p. 2; Ms Deanne de Leeuw, Proof Committee Hansard, Canberra, 17 October 2008, p. 69

[12]      Mr Ray Borradale, Submission 16, p. 17

[13]      Mr Garry Clarke, Submission 119, p. 2

[14]      Ms Heather Shearer, Submission 79, p. 2

[15]      Ms Sam Gow, Submission 61, p. 12

[16]      Ms Deanne de Leeuw, Proof Committee Hansard, Canberra, 17 October 2008, p. 62

[17]      Ms Deanne de Leeuw, Proof Committee Hansard, Canberra, 17 October 2008, p. 69

[18]      See, for example, Ms Suzanne Brown, Submission 84 and Ms Deanne de Leeuw, Submission 114.

[19]      Mr Scott Cooper, Submission 15, p. 17

[20]      Ms Nicole Hoy, Submission 8, p. 4

[21]      Mr Graeme Samuel, Proof Committee Hansard, Melbourne, 5 November 2008, p. 85

[22]      Mr Brian Cassidy, ACCC, Proof Committee Hansard, Melbourne, 5 November 2008, p. 97

[23]      Mr Graeme Samuel, Proof Committee Hansard, Melbourne, 5 November 2008, p. 97

[24]      Mr Graeme Samuel, Proof Committee Hansard, Melbourne, 5 November 2008, p. 98

[25]      Ms Heather Shearer, Submission 79, p. 2

[26]      Mr Scott Cooper, Submission 15, p. 5

[27]      Ms Nicole Hoy, Submission 8, p. 1

[28]      Mr Graeme Samuel, ACCC, Proof Committee Hansard, Melbourne, 5 November 2008, p. 103; ACCC, Submission 60, pp 23-24

[29]      ACCC, Submission 60, p. 23. This is reference to Recommendation 10.1 of the Productivity Commission's recent report, Review of Australia's Consumer Policy Framework, vol. 2, p. 251

[30]      SA Parliamentary Economic and Finance Committee, Franchises, May 2008, p. 42

[31]      WA Small Business Development Corporation, Inquiry into the Operation of Franchise Businesses in Western Australia, April 2008, p. 49

[32]      For examples, see Submission 49, Submission 61, Submission 114 and Submission 119.

[33]      ACCC, Submission 60, p. 24

[34]      Mr Brian Cassidy, ACCC, Proof Committee Hansard, Melbourne, 5 November 2008, p. 99

[35]      The committee notes that the ACCC described this power as 'being able to undertake risk based audits' and went on to clarify that this would entail examination of disclosure documents and other material being circulated by a franchisor, as well as speaking with franchisees to discern any pattern of conduct. See Mr Brian Cassidy, ACCC, Proof Committee Hansard, Melbourne, 5 November 2008, p. 99