The ACCC’s Deputy Chair Mick Keogh called for changes to the Franchising Code and a stronger unfair contract terms (UCT) law when he recently spoke at the National Franchise Convention Legal Symposium.
Mr Keogh highlighted that both the Franchising Code and Oil Code could more effectively protect franchisees and improve the operation of franchise businesses in Australia by:
- significantly increasing penalties for breaches of the codes
- requiring franchisors to disclose more meaningful information to franchisees.
In his speech, Mr Keogh spoke about the need to strengthen the UCT law to adequately protect small businesses, including franchisees. The biggest limitations within the current legislation are that unfair contract terms are not illegal, and a business does not face a penalty for including unfair terms in the first place.
Mr Keogh also raised concerns 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.
An update was also provided about the potential ‘class exemption’ to allow businesses, including franchisees, to negotiate collectively without having to seek the ACCC’s authorisation. A class exemption would provide a ‘safe harbour’ for businesses to engage in certain conduct, which aims to streamline the process, and save time and money.
Find out more in our media release.
Kind regards,
Small Business team
Australian Competition and Consumer Commission (ACCC)
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