MTAA Welcomes Franchising Inquiry Report Recommending Fairness in Franchising Relationships

The Parliamentary Joint Committee on Corporations and Financial Services Report Opportunity not opportunism: improving conduct in Australian franchising is a welcome acknowledgement by the Committee that more needs to be done in relation to the regulation of franchise relationships in Australia.

The Motor Trades Association of Australia (MTAA) has long advocated for reforms to the Franchising Code of Conduct and the Trade Practices Act 1974 to require provisions for fairness and equality within franchising agreements. The Committee’s recommendations for a strengthening of the Franchising Code of Conduct reflect the policy position the Association has held for quite some time.

Similarly, the Committee’s acknowledgement of the importance of the franchise relationship during the execution and term of the franchise agreement is a welcome development in the franchising reform debate and should not go unrecognised.

MTAA considers that the Committee’s recommendation that the Franchising Code of Conduct be amended to include a ‘good faith’ provision in it is a significant step towards the creation of co-operative and enduring relationships between franchisees and franchisors. The Association also welcomes and supports the Committee’s recommendations on the need for pecuniary penalties for breaches of the Franchising Code of Conduct and possibly certain breaches of the Trade Practices Act 1974 and also the creation of a register of franchise agreements. These measures which are welcomed by the Association would do much to encourage the behaviour change in the sector that the Association has long sought. MTAA has long campaigned against unfair terms in franchise agreements and will continue to support measures which provide for redress against any unconscionable behavior within the Australian franchising sector.

MTAA and its Members thank the Committee for its efforts in championing equity and fairness in the franchising sector. The Association encourages the Government to support the recommendations and to make arrangements for the introduction of the necessary amendments to the Franchising Code of Conduct and the Trade Practices Act 1974 as soon as possible.

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2 December 2008

For further information please contact Verity Jausnik of MTAA on (02) 6273 4333.