Minister under fire over franchise delay

"Of particular concern is that despite the (inquiry's) report having been tabled over three months ago, there is still no indication from the minister as to if and when…This had created a policy vacuum which raised "serious questions" about Mr Emerson's commitment to implementing the recommendations.

WA Today
March 11, 2009

Minister under fire over franchise delay

Still no closure months after an inquiry into the contentious world of one of Australia's biggest industries.

Several months after an inquiry into the contentious world of one of Australia's biggest industries, those involved are still no closer to finding out if anything will be done.

A Federal joint parliamentary committee inquiry into the franchising code of conduct - convened after sustained pressure from disgruntled franchisees angry at what they saw as being "ripped off" by franchisors - made several recommendations in December for the improvement of the $128 billion-a-year industry.

These included requiring better disclosure from franchisors, looking for a better way to balance the rights of franchisors and franchisees if the former failed, and looking at amending the Trade Practices Act to include monetary penalties for breaches of the code.

The Australian Competition and Consumer Commission would also be given greater powers to investigate when it received "credible information" that a party had conducted itself contrary to the code.

The recommendations met with a mixed response, with franchisees angered by previous ACCC investigations saying it did not go far enough, and the Franchise Council of Australia calling for careful consideration before applying monetary penalties.

Bernie Ripoll, the Labor MP who chaired the inquiry, has said he was confident there would be a new system this year.

But government colleague and small business minister Craig Emerson has not responded to numerous recent requests from WAtoday.com.au on the progress in implementing the recommendations or whether he had even considered the inquiry's report.

The Government has yet to submit a formal response to the report.

Frank Zumbo, an associate professor of business law at the University of NSW and franchising expert, said it was "very disappointing" Mr Emerson had not taken the opportunity to respond to the recommendations.

"Of particular concern is that despite the (inquiry's) report having been tabled over three months ago, there is still no indication from the minister as to if and when

This had created a policy vacuum which raised "serious questions" about Mr Emerson's commitment to implementing the recommendations.

"The franchising sector deserves better as it is a significant contributor to the economy," Mr Zumbo said.

"It is equally disappointing that it appears that there is no consultative process in place to seek the franchising sector's response to the Ripoll recommendations."

Mr Zumbo called for the immediate implementation of two of the recommendations - that of monetary penalties to signal to franchisors that they needed to comply with the code, and a statutory duty of good faith measure to ensure both parties behaved reasonably toward each other.


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