New franchising inquiry slammed by ARA

Posted by Daniel Palmer on 14th July 2008

Peak retail industry body the Australian Retailers Association (ARA) has hit out at the Federal Parliament’s announcement to have another Inquiry into the Franchising Code of Conduct and demands it ‘be the last’.

The inquiry, which began on June 25, is to determine whether or not improvements to the Code are required.

ARA Executive Director and former CEO of the Franchise Council of Australia, Richard Evans, is bemused by the Parliamentary Corporations and Financial Services Committee’s decision to hold an inquiry only months after passing new legislation after the extensive Matthews Inquiry.

“How many inquiries will it take for uninformed politicians to realise Australia is a world leader when it comes to franchising regulation and practice?” He queried. “Since the introduction of the Franchising Code of Conduct we have been in constant review and perhaps it’s time the sector gained respect from legislators more attuned to a bad story as opposed to the many successes Australian franchising brings.”

Mr Evans added that the Australian Code was a benchmark with many other countries following our lead. “With 52 per cent of all franchising systems sitting in the retail market – the franchising sector is an important player already suffering a crisis of confidence with rising interest rates and petrol prices,” he said. “Australia’s $128 billion franchising sector is world’s best practice – with a Code of Conduct that is the envy of the franchising world. The Australian model has been adapted by other countries in the development of their legislation. With extremely low levels of disputes – why listen to the political posturing of the minority and spend thousands of taxpayers dollars to dissect an industry already punching above its weight?”

“Too many politicians this year have used “coward’s castle” to make unsubstantiated claims about leading, highly regarded franchise brands in a sector employing over 600,000 Australians and offering them chance to build and own their own business with tried and tested models,” Mr Evans claimed.

“Let this inquiry be the last inquiry for the franchise sector for some time and allow a sense of certainty to develop within the sector. Businesses fail – that is true – but it is not the Franchising Code of Conduct that let’s them down. Let all people with any gripes against the franchise sector submit to yet another inquiry and allow this report to consider the strength of the franchise sector,” Evans concluded.

Submissions to the inquiry are welcomed until September 12 with the Committee due to report their findings by December 1.

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