Australia's franchise sector is a powerhouse within the nation's economy, comprising 1,144 franchise systems and approximately 70,735 franchisees. Employing over half a million people and generating a staggering $135.2 billion in turnover in 2023, it's undeniable that the sector plays a vital role in the economic landscape of the country.
Despite its significant contributions, recent years have seen the growth of the franchise sector lagging behind other segments of small businesses. Recognizing the importance of addressing this issue, a comprehensive review of the franchise sector was conducted from August to December 2023. This review aimed to evaluate the effectiveness of the regulatory framework, identify areas for improvement, and propose recommendations to support the sustainable growth of the sector. The final report was issued on 8 February 2024.
One of the key findings of the review was the overall suitability of the Franchising Code of Conduct. However, it also highlighted the need for certain amendments to better protect franchisees, including extending protections for new vehicle dealerships to all franchisees. Moreover, there was a consensus that enhancing the operating environment for the sector, such as providing better government information and guidance on best practices, could further support its growth and stability.
One notable recommendation put forth by the review is the consideration of a licensing (ex ante) approach as an alternative or complementary regulatory framework to the existing ex post regulatory regime. This approach aims to address persistent issues within the sector more proactively, potentially reducing regulatory burden and complexity while ensuring better compliance and oversight.
However, before embarking on such a fundamental shift, a comprehensive analysis is imperative to assess the feasibility, implications, and potential benefits of transitioning to a licensing model. While the ex ante reform holds promise in addressing systemic challenges, careful deliberation and stakeholder engagement are essential to ensure its effectiveness and minimize unintended consequences.
The review process itself was marked by extensive public consultation, with over 40 meetings and roundtables held, and 95 submissions received from various stakeholders. Additionally, input from franchisees and analysis from the Australian Bureau of Statistics further enriched the review's findings and recommendations.
In conclusion, the review of Australia's franchise sector underscores the importance of continual evaluation and adaptation of regulatory frameworks to support its growth, sustainability, and resilience. By implementing targeted reforms and exploring innovative approaches, Australia can foster a thriving franchise ecosystem that not only drives economic prosperity but also fosters a culture of fairness, transparency, and accountability within the sector.
Despite its significant contributions, recent years have seen the growth of the franchise sector lagging behind other segments of small businesses. Recognizing the importance of addressing this issue, a comprehensive review of the franchise sector was conducted from August to December 2023. This review aimed to evaluate the effectiveness of the regulatory framework, identify areas for improvement, and propose recommendations to support the sustainable growth of the sector. The final report was issued on 8 February 2024.
One of the key findings of the review was the overall suitability of the Franchising Code of Conduct. However, it also highlighted the need for certain amendments to better protect franchisees, including extending protections for new vehicle dealerships to all franchisees. Moreover, there was a consensus that enhancing the operating environment for the sector, such as providing better government information and guidance on best practices, could further support its growth and stability.
One notable recommendation put forth by the review is the consideration of a licensing (ex ante) approach as an alternative or complementary regulatory framework to the existing ex post regulatory regime. This approach aims to address persistent issues within the sector more proactively, potentially reducing regulatory burden and complexity while ensuring better compliance and oversight.
However, before embarking on such a fundamental shift, a comprehensive analysis is imperative to assess the feasibility, implications, and potential benefits of transitioning to a licensing model. While the ex ante reform holds promise in addressing systemic challenges, careful deliberation and stakeholder engagement are essential to ensure its effectiveness and minimize unintended consequences.
The review process itself was marked by extensive public consultation, with over 40 meetings and roundtables held, and 95 submissions received from various stakeholders. Additionally, input from franchisees and analysis from the Australian Bureau of Statistics further enriched the review's findings and recommendations.
In conclusion, the review of Australia's franchise sector underscores the importance of continual evaluation and adaptation of regulatory frameworks to support its growth, sustainability, and resilience. By implementing targeted reforms and exploring innovative approaches, Australia can foster a thriving franchise ecosystem that not only drives economic prosperity but also fosters a culture of fairness, transparency, and accountability within the sector.