25/01/2011 - 14:22

Franchising legislation no benefit: FCA

25/01/2011 - 14:22

Bookmark

Upgrade your subscription to use this feature.

The Franchise Council of Australia has questioned the need for Western Australia to introduce state-based franchising legislation, because it would duplicate national regulations.

Franchising legislation no benefit: FCA

The Franchise Council of Australia has questioned the need for Western Australia to introduce state-based franchising legislation, because it would duplicate national regulations.

FCA executive director Steve Wright said the need for state-based legislation, which is being assessed by a WA Parliamentary Committee, had been canvassed and rejected by five inquiries since 2007.

Mr Wright said FCA members reported limited numbers of contract renewal issues with the existing national regulatory frameworks in place.

"There is simply no need for this legislation," Mr Wright said.

"Regulation of the franchise industry is already covered by a national code of conduct that was strengthened just six months ago, the Trade Practices Act and the Australian Competition and Consumer Commission.

"Both franchisors and franchisees are telling us they don't need or want this legislation.

"With increased compliance costs, a disincentive to investment in WA and duplication of the national regime, this approach is all risk with no benefit."

The FCA has called for the abandonment of state-based legislation and regulation; a moratorium on regulatory changes until 2012/2013 and an increased focus on education and dispute resolution.

"Research undertaken last year indicates that 95 per cent of member respondents do not support State based legislation," Mr Wright said.

"And 90 per cent said they would review their investment intentions in WA should state-based legislation be passed, so it is hard to see how this can be good for the state."

Mr Wright said most of the recommendations of the recent inquiries into franchising had been implemented by the Federal Government in its reform package announced mid last year.

"The WA Inquiry found franchising to be in good health overall and recommended that any changes be carried out under the Federal regime."

"Its report said that state-based legislation had definite disadvantages; why we are contemplating it now is not clear; especially as there has been no major mishap in franchising since the WA Inquiry."

The Federal Government implemented the Franchising Code of Conduct July 1 last year, and handed the Australian Competition and Consumer Commission discretionary powers January 1 this year.

"We should be allowing those changes time to take effect before jumping into regressive state-based laws," Mr Wright said.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options