22/02/2011 - 11:24

Council ramps up franchise pressure

22/02/2011 - 11:24

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The adversaries in a heated battle over regulation of the franchising industry in Western Australia have used submissions to a parliamentary inquiry to argue their cases.

The adversaries in a heated battle over regulation of the franchising industry in Western Australia have used submissions to a parliamentary inquiry to argue their cases.

The Franchise Council of Australia, which has vehemently criticised a proposed bill, said submissions to the inquiry overwhelmingly opposed it.

The bill's supporters have rolled out heavyweight legal opinions to bolster their case.

Proposed by state Liberal backbencher Peter Abetz, the bill is designed to protect franchisees from 'rogue' franchisors who seek to exploit their bargaining power.

Mr Abetz has been backed by two of the country's largest franchisors, Hungry Jack's owner Jack Cowin and Jim's Group owner Jim Penman.

Mr Cowin is also a KFC franchisee and has acknowledged that his support for the bill is driven in part by his dispute with KFC master franchisee Yum! Brands.

Two franchisees and five former franchisees have lodged submissions in favour of the bill, while 19 have made submissions against it.

In addition, the Law Council of Australia, the WA Law Society, WA's Commerce Department, the federal government's Department of Innovation and Industry, the National Retail Association and the Shopping Centre Council of Australia were among a dozen bodies expressing their concerns over the bill.

Franchise Council executive director Steve Wright said the submissions to the committee made it clear that Mr Abetz's bill should be scrapped.

"Its motivation has been questioned in Parliament, its contents are ill-considered and counter-productive and its potential consequences are considerable," Mr Wright said.

"If implemented, it would lead to a sudden and damaging drop-off in investment and employment in the WA small business sector.

"And it could be years before this was recovered, potentially costing the WA economy hundreds of millions of dollars of active business spending and employment."

In contrast, three prominent lawyers have provided support for the bill, and specifically the role of state governments in introducing legislation to reform the industry.

Former Federal Attorney-General Daryl Williams, QC, leading WA QC Malcolm McCusker and Sydney-based SC Alan Robertson have all provided written opinions to the inquiry.

Mr Williams said that the Franchising Bill 2010 was a valid piece of legislation that was constitutionally within the rights of the WA Parliament to enact.

"In our opinion the Bill fills a gap in the Franchising Code of Conduct by affording a measure of protection to franchisees and thereby addressing the disparity of power between a franchisor and franchisee, as well as providing specific forms of relief appropriate to the franchising industry," his submission stated.

"The Bill requires both franchisor and franchisee to deal with each other in good faith."

Supporters of the bill launched a website last month to try and bolster their campaign. The website, FairGoLegislation.org, outlines the details and rationale for the bill.

 

 

 

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