1 June 2021

New protections for small and family businesses in Australia’s franchising sector

Minister for Employment, Workforce, Skills, Small and Family Business, Stuart Robert, today released the Morrison Government’s reforms to the Franchising Code of Conduct.

The significant reform package reflects extensive feedback and consultation with the franchising sector and delivers what is needed to restore confidence and address power imbalances to protect our greatest resource, Australian small and family-owned businesses.

Minister Robert said Australia’s franchising sector makes a significant contribution to the economy through approximately 90,000 franchisee small and family businesses.

‘Australia’s franchise sector has over 1,200 brands and is worth $154 billion,’ Mr Robert said.

‘The Morrison Government is ensuring the Franchising Code keeps pace with changes to business and the sector can contribute to our economic recovery by improving access to information for franchisees and prospective franchisees, a better balance the rights of franchisors and franchisees and improved access to justice though additional, more efficient dispute resolution processes.’

The reforms, majority of which will start on 1 July 2021, implement the Morrison Government’s response to the parliamentary Fairness in Franchising report and committed reforms for Australia’s automotive dealerships.

Minister Robert thanked the franchising sector for engaging in the reform process.

The Government has also committed to significantly increase penalties for breaches of the Code with enabling legislation is currently before the parliament.

The reforms follow the 2021-22 Budget announcement of $4.3 million for a new Franchise Disclosure Registry which will assist prospective franchisees to make an informed decision before entering a franchise agreement.

A discussion paper to consider further reforms for franchising in the automotive sector will be released shortly.

Further detail of the Franchising Code of Conduct reforms can be found on the Treasury website.