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Opportunity not opportunism: improving conduct in Australian franchising
1 December 2008
© Commonwealth of Australia 2008
ISBN 978-1-74229-017-1 |
View the report as a single document - (PDF 1367KB)
View the report as separate downloadable parts:
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Members of the Committee |
(PDF 102KB) |
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Duties of the Committee |
(PDF 112KB) |
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Terms of Reference |
(PDF 85KB) |
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Executive summary |
(PDF 167KB) |
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Chapter 1 - Introduction |
(PDF 128KB) |
Terms of reference
Relevant regulation and legislation
Conduct of the inquiry
Acknowledgement
Note on references
Report structure
Privilege issue |
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Chapter 2 - The franchise model |
(PDF 135KB) |
The franchise business model
Franchising appeal
Franchise contracts
Differing expectations
Power imbalance |
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Chapter 3 - Franchising in Australia |
(PDF 237KB) |
The Australian franchising sector
Franchise numbers and size
Types of businesses
Age of franchise systems
Franchise system exit data
Franchisee characteristics
Franchisee turnover
Dispute levels
Regulatory and representative bodies in Australian franchising
Australian Competition & Consumer Commission (ACCC)
Office of the Mediation Adviser (OMA)
Department of Innovation, Industry, Science and Research (DIISR)
Franchise Council of Australia (FCA)
Franchisees Association of Australia Inc (FAAI)
Franchising regulation in Australia
Franchising Code of Conduct
Disclosure
Conditions of the agreement
Dispute resolution
Relevant Trade Practices Act provisions
Relevant case law
Ketchell v Master Education Services Pty Ltd
Hoy Mobile Pty Limited v Allphones Pty Ltd
Implications for the franchising sector
Other mandatory industry codes
Oilcode
Horticulture Code
State regulation
Background to the current regulatory system
Swanson and Blunt reviews
Exposure drafts of a franchising bill
Beddall Committee report
Voluntary franchising code of practice
Reid Committee report
Mandatory code of conduct
Matthews Review and subsequent amendments to the Code
WA and SA inquiries
Franchise-specific legislation |
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Chapter 4 - Pre-contractual arrangements |
(PDF 270KB) |
Definitional issues: coverage of the Franchising Code of Conduct
Pre-contractual education
Pre-contractual advice
Due diligence and disclosure
Length of disclosure documentation
Accuracy and completeness of disclosure
Frequency of disclosure
Disclosure of leasing arrangements
Disclosure of rebates and similar financial arrangements
Disclosure of franchisor relationships with financial institutions
Calls for the inclusion of risk statements
Calls for registration or vetting of disclosure documents and standard form contracts
Disclosure exemption for foreign franchisors |
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Chapter 5 - Issues arising during franchise agreements |
(PDF 173KB) |
Challenges to the working relationship
Unilateral variation of franchise agreements
Compliance with the operations manual
Opportunism
Restraint of trade clauses
Confidentiality clauses
Advertising funds |
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Chapter 6 - The end of a franchise agreement |
(PDF 269KB) |
Non-renewal
Pre-contract disclosure
Conditions of non-renewal
Termination
Termination – breach by franchisees
Termination – special circumstances
Termination – no breach by franchisee
Exit arrangements
Goodwill
Market value
State inquiries |
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Chapter 7 - Dispute resolution in franchising |
(PDF 237KB) |
The need for a dispute resolution process
Existing mediation provisions
Statistical measures of disputation in franchising
Effectiveness of mediation
Franchisee views
Franchisor views
Limitations of mediation
Suggested improvements to the mediation process
Good faith in mediation
Alternative dispute resolution mechanisms
Pre-mediation processes
Tribunal
A franchising ombudsman
Arguments for maintaining the status quo |
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Chapter 8 - Good faith in franchising |
(PDF 199KB) |
Implied or explicit good faith
Good faith in section 51AC of the Trade Practices Act
Defined versus general good faith
Implications for current agreements and other sectors |
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Chapter 9 - Enforcement of the Franchising Code of Conduct |
(PDF 192KB) |
Enforcement framework
ACCC investigation and enforcement activities
Barriers to effective enforcement
Level of ACCC activity
Prohibitive costs of independent litigation
Improving enforcement tools
Pecuniary penalties
Investigative power |
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Appendix 1 - Material received by the committee |
(PDF 129KB) |
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Appendix 2 - Witnesses who gave evidence at public hearings |
(PDF 109KB) |
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Appendix 3 - Report on a matter of parliamentary privilege |
(PDF 525KB) |
For further information, contact:
Committee Secretary
Parliamentary Joint Committee on Corporations and Financial Services
PO Box 6100
Parliament House
Canberra ACT 2600
Australia
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