Western Australia is leading the charge in creating greater certainty for both franchisors and franchisees in laws governing the franchising industry, Small Business Minister Margaret Quirk said today.
Australian State and Territory and New Zealand Small Business ministers at the Small Business Ministerial Council in Christchurch, New Zealand, welcomed the recommendations made by an independent inquiry into WA’s franchise business.
“The State Government’s position that consideration should continue to be given to the introduction of a well-defined obligation for parties to bargain and negotiate in ‘good faith’ as part of the franchising code of conduct was endorsed by all ministers,” Ms Quirk said.
“This aspect of the industry can be improved dramatically to create greater certainty and more clearly defined obligations for those involved in franchise agreements.”
The Minister said the State Government commissioned the franchise inquiry to provide a health check of the industry in WA.
“The Federal Government is responsible for the laws relating to the franchising industry, but it is clear that WA has taken a strong lead in pushing for a better system with better protections,” she said.
“I have welcomed the chance to tackle this issue and from the reception of my colleagues on the Small Business Ministers Council, I would say the findings and recommendations that have arisen from our report have given us clear direction on how to improve the running of a very important business sector.”
Ms Quirk said the report recommended that the Federal Government amend the Franchising Code of Conduct to make it compulsory for parties in dispute to attend mediation procedures and to ensure mediation agreements were enforceable with prescribed penalties set out for non-compliance.
The report also recommended strengthening issues relating to end-of-agreement arrangements and matters surrounding the non-renewal of franchise agreements.
The Franchise Inquiry Report is available at http://www.sbdc.com.au
Minister's office: 9213 7000