Federal Government releases draft amendments to Franchising Code

The Federal Government has released its much anticipated proposed amendments to the Franchising Code of Conduct (the Code).

The Minister for Small Business, the Hon Bruce Billson MP, also released a statementoutlining the reforms, which are in response to the 2013 Wein Review of the Code. If the reforms proceed as proposed, the amendments to the Code will come into effect from 1 January 2015, and will apply to new franchise agreements entered into on or after 1 January and existing franchise agreements that are renewed on or after 1 January, subject to some limited exceptions.

Reform proposals generally

For the first time, financial penalties of up to $51,000 will be imposed for breaches of the Code. In addition to these penalties, parallel amendments in the Competition and Consumer Act will give the ACCC power to issue infringement notices up to $8,500 for breaches of the Code.