Concern over new franchising laws
THE Gympie business community is increasingly concerned about new franchising laws, said to have the potential to bankrupt innocent Australians and lead to a big increase in court action.
Gympie Chamber of Commerce president and well known solicitor Simon Young says the new Franchising Code of Conduct is badly worded and has potential to do great harm to the innocent business people it is supposed to be protecting.
Mr Young says about 100 Gympie small and family businesses are franchise operations, potentially affected by the new rules.
Mr Young says he will be speaking on the new rules next Wednesday at a Gympie Chamber of Commerce business breakfast at Gympie RSL Club’s Orchid Room, with guests due to arrive from 7am.
“I’ll be looking at the need for input from the business community in refining or changing the new rules, which govern how every business on a franchise agreement operates.
“There are more than 100 Gympie businesses that are franchises and it is a very important sector of the business community.
“The changes to the law are poorly worded and in some situations it could lead to businesses suffering.
It could certainly lead to the number of people wishing to enter a franchise industry grinding to a halt.
“The trouble is that most franchisees, already paying off their business and loans to finance it, do not have the money to go to court to have their matters determined,” Mr Young said.
The changes causing the concern were announced last month by federal Small Business Minister Craig Emerson and took effect from yesterday.
In a news release at the time, Mr Emerson said the regulatory changes he introduced would “give effect to the Government’s proposed reforms.”
The reforms were outlined in the government’s responses to both the Parliamentary Joint Committee on Corporations and Financial Services and a report conducted by an expert panel commissioned by Mr Emerson.
The new regulations evolved from a 2008 report, “Opportunity not opportunism: improving conduct in Australian franchising.”
A year later, the government responded to the “Commonwealth Parliamentary Joint Committee on Corporations and Financial Services franchising industry report.”
Mr Young said the report seemed to have missed the point for many franchisees.