Franchising code of conduct
The Franchising Code of Conduct
(Franchising Code) is a mandatory code that is prescribed under the Competition and Consumer Act 2010
The purpose of the Franchising Code is to regulate the conduct of participants in franchising towards other participants in franchising. Broadly, it achieves this by requiring franchisors to disclose specific facts to franchisees and to follow set procedures in their dealings with franchisees.
The Australian Competition and Consumer Commission (ACCC) is responsible for the administration and enforcement of the Franchising Code.
The new Franchising Code of Conduct
The new Franchising Code of Conduct commenced on 1 January 2015 and puts in place the franchising policy reforms outlined in the Government’s ‘Future of Franchising’ statement, which was released on 2 April 2014: [RTF 1.2MB | PDF 181KB]
New penalties framework
The Competition and Consumer Amendment (Industry Code - Penalties) Act 2014 also commenced on 1 January 2015 to work in conjunction with the new Franchising Code.
The reforms to the Franchising Code have introduced pecuniary penalties (up to $54,000) and allow the ACCC to issue infringement notices ($9,000 for a body corporate and $1,800 in any other case) for contravention of a civil penalty provision of that code.
2013 Wein Review of the Franchising Code
The above reforms build on the 2013 independent review of the Franchising Code of Conduct by Mr Alan Wein.
Industry codes mediation services
The Australian Government funded Office of the Franchising Mediation Adviser assists franchisors and franchisees resolve their problems and disputes through mediation, which is often a less costly option to going to court.
Further information on the individual services for franchising and other industry codes of conduct can be found at the following websites:
Previous franchising reviews
3 March 2010
The expert panel's report Strengthening Statutory Unconscionable Conduct and the Franchising Code of Conduct was released together with the former government's response.
The Joint Committee and expert panel were informed by submissions and evidence from small business stakeholders within the franchising, business and academic sectors.
27 November 2009
An expert panel was established to report on franchising and unconscionable conduct. The panel provided advice to the then government on some outstanding issues raised in the Joint Committee's franchising inquiry and the Senate Standing Committee on Economics inquiry report into the 'The need, scope and content of a definition of unconscionable conduct for the purposes of Part IVA of the Trade Practices Act 1974'.
5 November 2009
The then government tabled its response to the Commonwealth Parliamentary Joint Committee on Corporations and Financial Services (Joint Committee) franchising inquiry report.
A Regulation Impact Statement (RIS) was prepared to inform the then government’s response to the Joint Committee's franchising inquiry report.
1 December 2008
The Commonwealth Parliamentary Joint Committee on Corporations and Financial Services Inquiry into Franchising tabled in the Parliament its Report – 'Opportunity not opportunism: improving conduct in Australian franchising'. The Joint Committee made 11 recommendations for improving conduct within the sector.
In 2008, the Franchising Code was amended following a review chaired by Mr Graeme Matthews (Review of the Disclosure Provisions of the Franchising Code of Conduct, October 2006). The then Government response to the Matthews review was released in February 2007.