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The ACCC and the Franchise Code

Last week saw the Australian Competition and Consumer Commission (ACCC) make their opening statement in the Franchising Code of Conduct inquiry at the Parliamentary Joint Committee (PJC).

This was an opportunity for the competition regulator to address some of the vulnerabilities with franchiser/franchisee relationships.

With systematic challenges noted in the industry—in particular, the underpayment of employees—the ACCC said that while, this falls outside their remit, it is in the remit of the Fair Work Ombudsman (FWO).

Addressing the gaps

The Franchising Code exists to address regulatory gaps.

The activities of the ACCC in franchise matters include:

  • the provision of comprehensive franchise education and guidance materials;

  • an active Franchise Code compliance program; and

  • enforcement activities, including the issuing of penalties and court action in cases when breaches of the law are sufficiently serious.

The ACCC provides their education program, FranchiseED, which is designed to help franchisees be aware of their rights under the code, and actively conducts ‘a code of compliance program’ annually.

“Our recent franchise enforcement actions have included Domino’s Pizza, West Aust Couriers Pty Ltd—trading as Fastway Couriers (Perth), Pastacup franchisor Morild, and Husqvarna. The ACCC is also currently involved in two proceedings before the Federal Court against Ultratune and Geowash (a former national franchisor), and we have material investigations underway into several others,” the ACCC said.

The ACCC indicated that they receive 400 reports a year about franchises.

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