Franchising regulation in Australia : recent trends and current issues

The Australian franchising sector consists of almost 1,200 different franchise systems and some 73,000 individual franchisee units. Since 1998, a mandatory national industry code of practice, the Franchising Code of Conduct, has spelt out certain prescribed minimum standards of information disclosure, dispute resolution and associated issues. Franchising is also subject to the Competition and Consumer Act. Both of these laws are enforced by the Australian Competition and Consumer Commission, which also has responsibility for educating the sector. This article broadly outlines the current state of Australian franchising, explains the key elements of both the Code and Act that are relevant to franchise systems, and gives a brief overview of the ACCC's enforcement and education work in the sector. It concludes by discussing some recent developments, including the introduction of Small Business Commissioners, possible pecuniary penalties for breaches of the Franchising Code, state-based franchising laws, and increasing international linkages between franchising regulators.