The Australian Competition and Consumer Commission (ACCC) has called for changes to the Franchising Code and a stronger unfair contract terms (UTC) law.

The ACCC’s Deputy Chair Mick Keogh recently spoke at the National Franchise Convention Legal Symposium highlighting that both the Franchising Code and Oil Code could work more effectively to protect franchisees and improve the operation of franchise businesses in Australia by:

• requiring franchisors to disclose more meaningful information to franchisees; and
• significantly increasing penalties for breaches of the codes.

My Keogh spoke about the need to strength the UCT law to adequately protect small businesses, including franchisees.

Currently the biggest limitations within current legislation are that unfair contract terms are not illegal, and businesses do not face a penalty for including unfair terms in the first place.

Concerns have also been raised with suggestions that the ACCC operate a public register for franchise systems.

The ACCC believes this may create the perception that information provided by franchisors has been audited or ‘accredited’, and could result in even fewer potential franchisees doing their due diligence.

Read more in the ACCC Media Release Here

Source: The Australian Competition and Consumer Commission (ACCC)

17 Oct 2018