A contentious proposal to strengthen regulation of the franchising industry is expected to be referred to a parliamentary committee for review but the bill's sponsor says he still has significant support.
A contentious proposal to strengthen regulation of the franchising industry is expected to be referred to a parliamentary committee for review but the bill's sponsor says he still has significant support.
The Liberal member for Southern River, Peter Abetz, recently introduced to state parliament the WA Franchising Bill 2010, which has divided the industry.
Premier Colin Barnett told reporters this morning "the preference of the Liberal Party is that it be looked at by a committee".
His comments followed a meeting of Liberal Party MPs yesterday, where the bill was discussed.
"Peter is quite genuine in what he is bringing forward but there are a lot of differing views in the franchising world about this,' Mr Barnett said.
"It's a difficult issue in the sense that it would put parliament and law in between commercial relationships.
"I think a committee of the parliament would be the best way of proceeding."
Mr Abetz told WA Business News today that he remained keen to pursue franchising reform, to deliver more protection for franchisees against rogue franchisors.
"Anyone who thinks this franchising issue is going away is kidding themselves," he said.
Mr Abetz also disputed a press report that he got a "stoning" in the party room.
"I've got a significant number of people in the party who are very supportive."
The formal process for referring Mr Abetz's private member's bill to a committee will proceed in state parliament tomorrow.
The Franchise Council of Australia has stated that its members are alarmed by the proposed legislation, which it said, "seeks to impose a draconian set of new franchising rules".
In contrast, the bill has the support of the Retail Traders' Association, which believes the bill will protect franchisees from being unfairly treated by franchisors.
It also has the suppprt of Competitve Foods chairman Jack Cowin, which is both a franchisor through Hungry Jack's and a franchisee through KFC.
He issued a statement today saying he was disturbed by reports that the WA Liberal Party may "succumb to pressure from the Franchise Council of Australia to prevent reforms to the State's franchising laws".
Mr. Cowin said that for the past week the FCA had undertaken a "sustained misinformation campaign" directed at members of the Liberal Party.
He said the FCA does not represent the interests of the broader franchise community.
"There is ample material to prove that is not the case in the submissions that have been made to various franchising inquiries" his statement said.
Federal Small Business Minister, Senator Nick Sherry also issued a statement today welcoming the Liberal Party's reported decision on what he called "radical new legislation".
"The move ..... by the WA Liberals to reject a piecemeal state based approach recognises that a national approach to franchising makes sense and will deliver the best outcomes for franchisees, franchisors and the entire Australian economy.
"I hope similar moves in South Australia will be reconsidered in light of WA's decision," Senator Sherry said.
"The decision provides greater certainty for franchise businesses in WA and national franchise systems that operate in WA."
"They will no longer have to face the prospect of regulatory duplication and additional compliance burdens that could result from separate WA based franchising legislation."
Senator Sherry said the Australian government is fully aware of the importance of reform in the franchising sector and has recently introduced a comprehensive set of reforms.
These include:
- From 1 January 2011, the ACCC will have stronger powers to investigate and take action against breaches of the national Franchising Code of Conduct. These include rigorous new information gathering powers and the authority to issue public warning notices about rogue operators and to seek redress for all of those franchisees affected by a breach of the Code.
- The new Australian Consumer Law, which will also take effect nationally on 1 January 2011, will also give the ACCC and the State consumer bodies new powers to take action against misleading and deceptive conduct and unconscionable conduct towards small businesses, including franchisees.
- A range of amendments to the Franchising Code have also come into effect from 1 July 2010 to increase franchisor disclosure so that parties are more informed before they enter into a franchise agreement.
"Like all significant reforms, these changes need time to bed down and we should allow a proper period of time to evaluate their effects," Senator Sherry said.
"To do this, and to provide the sector with stability and confidence, the Government doesn't intend to review the code again before 2013."
