Since its introduction, the Competition and Consumer (Industry Codes-Franchising) Regulation 2014 (Cth) (the Franchising Code) has been subject to numerous updates and amendments. It appears even more could be on the horizon since the Australian Government announced in 2023 that a further review of the Franchising Code would take place led by Dr Michael Schaper, former deputy chair of the ACCC. But what will the report entail, and how will it impact the Franchising Code and the franchising industry at large? This article will unpack those questions, to assist franchisors and franchisees alike get on the front foot of any developments.
What is the review?
The review will, broadly, consider the effectiveness of the Franchising Code. More specifically, the review will consider:
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- the fitness for purpose of the Franchising Code;
- the role of the ACCC and Family Enterprise Ombudsman in franchise dispute resolution and enforcement of the Franchising Code;
- the impact of the 2022 amendments to the Franchising Code, including the super penalty provisions; and
- the Disclosure Register provisions, and their effectiveness.
When will the review be conducted?
The ‘information gathering’ stage of the review is complete, with interested parties having been invited to make submissions/ complete surveys in October and November 2023, and a report prepared was due to be submitted by Dr Schaper to the Minister for Small Business by the end of 2023. No report or update has been provided publicly as yet.
Will this mean changes to the Franchising Code?
Likely, yes, but we anticipate these will not become operative until 2025. This is because, firstly, getting new law operative can take some time and, secondly, the Franchising Code is due to expire in 2025 in any event.
The formal status of the report is that it remains ‘open’.
How do I keep abreast of developments?
You follow Magnolia Legal, of course! We will be keeping a close eye on this issue and providing further updates.