Franchising Code of Conduct – exposure draft

Response to the Franchising Code of Conduct Exposure Draft

We appreciate the opportunity to provide feedback on the proposed changes to the Franchising Code of Con- duct. As a small franchising group dedicated to fair and transparent practices, we would like to address the fol- lowing points and provide some insights from our experience:

1. Disclosure Requirements: We support enhanced disclosure requirements to ensure prospective fran- chisees receive comprehensive information. As we operate without a marketing levy, we emphasize provid- ing tailored support without additional financial burdens.

2. Good Faith Obligations: Our franchising model is grounded in mutual respect and fairness. We be- lieve the strengthened obligations to act in good faith will reinforce the principles we already uphold. How- ever, we feel that good faith should extend to landlords and lease agreements, particularly in the hospitality in- dustry where rent adjustments during difficult times are crucial.

3. Exit Arrangements: Clear guidelines for exiting agreements benefit both parties. We have transpar- ent exit procedures that protect both our interests and those of our franchisees.

4. Dispute Resolution: Effective dispute resolution is crucial. Our existing mechanisms align well with the pro- posed improvements, fostering swift and amicable resolutions.

5. Penalties: We support stronger penalties for breaches as they ensure compliance and fairness. How- ever, penalties should be proportionate to the nature and impact of the breach.

6. Transparency: Increased transparency is key to trust. We provide comprehensive and clear infor- mation to our franchisees, including advising them on both the positives and negatives to promote realis- tic and informed decision-making.

7. Training and Support: Our franchisees receive personalized training and ongoing support, ensur- ing they have the necessary skills and resources for success.

8. Marketing Funds: Without a marketing levy, we focus on individualized support, tailoring marketing efforts to each franchisee's specific needs.

9. Renewal and Termination: Clear rules on renewal and termination protect both franchisors and fran- chisees. Our agreements ensure fairness and clarity for all parties involved.

10. Online Sales: While we do not engage in online sales, we recognize the importance of regulat- ing them to ensure fair practices in other franchise systems.

11. Territory Rights: Clarified territory rights prevent conflicts and ensure franchisees have clear opera- tional boundaries.

12. Supply Chain: Transparent supply chain practices are crucial. We maintain clear and fair supply agree- ments to support our franchisees' operations.

13. Advertising: Our advertising guidelines are designed to be fair and transparent, ensuring all fran- chisees benefit from collective promotional efforts.

14. Intellectual Property: We protect and fairly use intellectual property within our franchise system, safe- guarding both our and our franchisees' interests.

15. Compliance: Enhanced compliance mechanisms help ensure adherence to the code, promot- ing a fair and reliable franchising environment.

16. Franchisee Rights: Strengthening franchisee rights aligns with our commitment to fairness and mutual re- spect within our franchise network.
17. Franchisor Responsibilities: Clearly defined responsibilities for franchisors support a balanced and equi- table franchising relationship.

18. Financial Disclosure: Improved financial disclosure requirements promote transparency and trust, key val- ues in our franchise relationships.

19. Conflict of Interest: Addressing conflicts of interest ensures fair and impartial dealings within our fran- chise system.

20. Franchisee Training: Our comprehensive training programs equip franchisees with the neces- sary skills and knowledge for success.

21. Franchise Agreement: Standardized franchise agreements ensure clarity and fairness across all our fran- chise relationships.

22. Franchisee Support: We are committed to providing ongoing support to our franchisees, ensur- ing their continued success and satisfaction.

23. Review and Feedback: Regular review and feedback mechanisms, ideally every 5 years, are essen- tial for maintaining the relevance and effectiveness of the code. However, we acknowledge the recent fre- quent changes since 2021 involving costs to redraft and time to incorporate and apply the changes that re- flect necessary adaptations to address significant industry issues and feedback. We actively seek and incorpo- rate feedback to improve our practices.

Conclusion: We appreciate the Government's efforts to improve the Franchising Code of Conduct and be- lieve these changes will benefit the entire franchising community. As a small group dedicated to fair- ness and transparency, we are confident that our current practices are aligned with the proposed amend- ments. Additionally, we strongly advocate for extending good faith obligations to landlords to create a more eq- uitable environment for all parties involved.