For those thinking about diving into the franchising pool, the penny has dropped that new franchisees are the golden geese and both sides of federal parliament are starting to look at protecting the newcomers from some of the sharks of the industry. And even the Franchise Council of Australia (FCA) is getting in on the act to make it safe for new swimmers.
Right now the Australian Government is in the process of reviewing the disclosures section of the Franchising Code of Conduct. This code was introduced in 1998 to make franchising safer for franchisees. While the industry has created great businesses and wonderful brand names with newcomers such as Boost and Gloria Jean’s becoming household names, in the past there were some real villains who exploited greenhorns, prompting an academic to say, on conditions of anonymity: ‘Once there was the wild west, but now there is franchising.’
Those bad old days have gone, but some franchisors have had business challenges and have not treated franchisees properly. Meanwhile, some franchisees have not had the qualities to be a successful player in a franchise system and so there have been complaints. Some have been legitimate; others questionable. Read more.