Small business ombudsman welcomes step forward on franchising reform

The government’s proposal forms part of its response to the parliamentary joint committee inquiry into the Franchising Code of Conduct.

The Australian Small Business and Family Enterprise Ombudsman Kate Carnell has welcomed the announcement.

“I am pleased to see that the response picks up on a number of the concerns of franchisees,” Ms Carnell said.

“The report focuses on the three key parts of the life cycle of a franchisee – entry, running the business, and exiting the business

“My office already deals with a broad range of complaints, centred around these aspects of owning a franchise. We know that the power imbalance between franchisor and franchisee makes negotiating disputes incredibly difficult.”

The response incorporates the functions of the franchising mediation adviser into the Ombudsman’s office.

“This is a welcome change that we and others have been advocating for over some time now that will help us more effectively resolve disputes,” Ms Carnell said.

The review points to further consultation on a number of important aspects in franchising practices and disputes.

“I remain concerned that the response’s commitment to ongoing consultation will further delay the changes that everyone in the sector know are sorely needed,” Ms Carnell said.

“I appreciate that this can be a complex area, but it has now taken a full 18 months for the government to respond to the parliamentary joint committee report. Further consultation and delay in effecting change is unacceptable and will continue to heap pressure on small businesses during these extremely difficult times.

“We will continue to advocate for timely and effective changes to assist small businesses, and look forward to working with the government to deliver these crucial reforms.”