Franchising Code of Conduct

For: 

The Franchising Code of Conduct regulates the conduct of franchisees and franchisors, including the obligation to act in good faith and for franchisors to disclose important information before a franchisee enters into a franchise agreement.

The Department of Employment, Skills, Small and Family Business has policy responsibility for the Franchising Code of Conduct.

The Australian Competition and Consumer Commission (ACCC) is responsible for the administration and enforcement of the Franchising Code.

The new Franchising Code of Conduct commenced on 1 January 2015 and puts in place the franchising policy reforms outlined in the Government’s Future of Franchising Statement.

The Inquiry and the Franchising Taskforce

On 22 March 2018, the Senate referred an Inquiry into the Operation and Effectiveness of the Franchising Code of Conduct to the Parliamentary Joint Committee on Corporations and Financial Services. The report was published on 14 March 2019.

If you would like to contribute information about franchising related matters, you can contact the Department of Employment, Skills, Small and Family Business at franchising@employment.gov.au.

The first recommendation of the Parliamentary Joint Committee was for the Government to establish a Franchising Taskforce to examine the feasibility and implementation of a number of the report’s recommendations. The Taskforce was established on 10 April 2019 with the following terms of reference:

Overview

On 14 March 2019, the Parliamentary Joint Committee on Corporations and Financial Services (the Committee) handed down its Fairness in Franchising report.

The Committee acknowledged that several of the recommendations made throughout its report require detailed consideration of whether and how they could be implemented to ensure that they operate effectively. To this end, the Committee recommends:

… that the Australian Government establish an inter-agency Franchising Taskforce to examine the feasibility and implementation of a number of the committee's recommendations. The Franchising Taskforce should include representatives from the Department of the Treasury, the Department of Employment, Skills, Small and Family Business and, where appropriate, the Australian Competition and Consumer Commission.

Responsibilities

The Taskforce will provide advice to the Minister for Employment, Skills, Small and Family Business and the Treasurer in the second half of 2019, which will inform the Government’s response to the Committee’s report. 

The response will provide an achievable plan for the reform of the franchising framework that is fair, effective and accountable for franchisors and franchisees while avoiding unnecessary regulatory burden. 

To do this the Taskforce will:

  • coordinate a whole of government response to the report recommendations;
  • oversee consultation, industry engagement and contributions from relevant portfolios.

Taskforce Membership

  1. The Taskforce will be co-chaired by the Department of Employment, Skills, Small and Family Business and the Department of the Treasury.
  2. The Taskforce will have representation from the Department of the Treasury, the Department of Employment, Skills, Small and Family Business and the Department of the Prime Minister and Cabinet.

Other agencies with policy or regulatory responsibility for relevant Industry Codes, including the Australian Competition and Consumer Commission, the Department of the Environment and Energy, the Department of Industry, Innovation and Science and the Department of Agriculture will be co‑opted as needed.

    New penalties framework

    The Competition and Consumer Amendment (Industry Code – Penalties) Act 2014 also commenced on 1 January 2015 to work in conjunction with the new Franchising Code.

    The reforms to the Franchising Code have introduced pecuniary penalties (up to $54,000) and allow the ACCC to issue infringement notices ($9000 for a body corporate and $1800 in any other case) for contravention of a civil penalty provision of that code.

    Office of the Franchising Mediation Adviser

    The Office of the Franchising Mediation Adviser assists franchisors and franchisees resolve their problems and disputes by referring the parties to trained mediators with experience located across Australia.

    Find out more about the Office of the Franchising Mediation Adviser

    2013 Review of the Franchising Code of Conduct

    On 4 January 2013, Alan Wein commenced an independent review of the Franchising Code of Conduct. The review looked at the 2008 and 2010 amendments to the code and resulted in the development of the new 2015 Franchising Code of Conduct.