Chairman of Australian Competition and Consumer Commission (ACCC) Rod Sims has said that as the franchising sector is an important part of the economy, more regulation is needed.
“The franchising sector is an important part of the Australian economy, but one that must improve its image to continue to grow,” he said at the Franchising Council of Australia (FCA) national convention on Monday.
As part of new powers under the Competition and Consumer Act, the ACCC is allowed to monitor compliance and seek the disclosure of documents that franchisors must provide under the Franchise Code of Conduct. The ACCC can also investigate alleged breaches, giving franchisees the ability to complain without fear of reprisal.
“The ACCC will continue to enforce the code of conduct and these new powers will allow the ACCC to do more, earlier, to support best practice in the industry,” he said.
Similarly, ACCC deputy chairman Michael Schaper outlined how the ACCC has begun applying new powers to increase transparency and disclosure.
“These new powers are designed to reassure potential entrants and existing franchisees that they will be provided with appropriate information from their franchisor throughout their contract,” Schaper said.
“The ACCC will monitor compliance where there is a significant imbalance in bargaining power between industry participants. These new powers will put franchisors on notice to abide by the code of conduct and keep their records in order.”