Franchising Reforms Broadly Welcomed

The franchise sector breathed a collective sigh of relief when the Minister for Small Business Craig Emerson announced the Government's official response to the report of the recent Federal Parliamentary inquiry into franchising. There had been fears that the Government would succumb to intense lobbying by some franchisee activists and academics to introduce a statutory duty of good faith, require registration of franchisors, grant explicit rights of renewal or compensation for franchisees at the end of the franchise term and introduce substantial fines for breach of the Franchising Code of Conduct ("the Code").

In announcing the response the Minister noted that "the Government recognises the legitimate concerns that were raised during the Joint Committee's inquiry and understands the need for parties to a franchise agreement to behave in a reasonable manner. It also recognises that franchising by its very nature is a commercial relationship covering a diverse range