Contract Dispute

Ombudsman welcomes proposed franchising reforms, hefty fines

admin — Fri, 10 Dec 2021 04:13:34 +0000

Ombudsman welcomes proposed franchising reforms, hefty fines admin Fri, 12/10/2021 - 15:13

12 March 2021

The Australian �Թ�� and Family Enterprise Ombudsman Bruce Billson has welcomed the government’s proposed reforms to the Franchising Code of Conduct, including changes specific to the automotive industry.

Under the proposed amendments to franchising laws, big businesses will face penalties of up to $10 million for wilful, egregious and systemic breaches of their obligations under the Franchising Code.

The suite of reforms seeks to specifically mitigate the power imbalance between multinational car manufacturers and Australian dealers.

“These proposed changes represent significant progress and once passed, will go a long way to levelling the playing field in the automotive franchising sector,” Mr Billson says.

”They will ensure that franchise-like arrangements where dealers are operating as the car-maker’s new vehicle sales agent still benefit from the Franchising Code protections.

“The changes that apply to the automotive industry are welcome as is the Government’s commitment to continue working with the automotive franchising sector to examine unfair contract terms in their agreements.

“A mandatory best practice framework will help address the ongoing issue of multinational car manufacturers who fail to follow the current voluntary principles. Examples of small car dealers being devastated by the actions of multinational manufacturers in recent years has warranted this action.

“Higher fines for significant breaches of the Franchising Code will act as a big stick that will force the larger players to think twice before acting unfairly towards their franchisees.

“We also welcome the government’s interest in exploring arbitration to provide small businesses with access to binding and right-sized dispute resolution pathways that are less costly and faster than going through the court system – a theme pursued in our Access to Justice report.

“My office looks forward to seeing the detail of this announcement and has been pleased to see the bipartisan support for the much-needed reforms to the franchising sector.

“I continue to encourage franchisees who believe they have been unfairly treated by a franchisor or are engaged in a franchise dispute to contact my office for assistance.”

Franchise Disclosure Registry to help restore confidence in sector

admin — Fri, 10 Dec 2021 03:41:34 +0000

Franchise Disclosure Registry to help restore confidence in sector admin Fri, 12/10/2021 - 14:41

13 May 2021

The Australian �Թ�� and Family Enterprise Ombudsman (ASBFEO) Bruce Billson has welcomed plans to establish a new mandatory Franchise Disclosure Registry, saying it will provide prospective franchisees with vital information needed prior to entering into a binding franchise agreement.

Mr Billson says the national registry, to be released next year, will require franchisors to lodge disclosure documentation about their franchise annually. These documents will be publicly available through the registry.

“There is a clear need of greater awareness in the franchise sector and this registry will certainly help restore confidence in this sector,” Mr Billson says.

“My office has advocated strongly for the implementation of this registry to improve transparency of franchise operations, so prospective franchisees are properly informed before signing a franchise agreement.

“Over the past six months my office has fielded over 240 calls from franchisees seeking information regarding disputes under Franchising Code of Conduct.

“This demonstrates just how critically important it is for prospective franchisees to know what they are getting into before signing a franchise agreement.

“The Franchise Disclosure Registry will be publicly available, to help prospective franchisees undertake vital due diligence that is necessary before entering into a franchise agreement.

“The cost of purchasing and setting up a franchise can be very significant, so it makes good business sense to do your homework first.

“As part of that due diligence, it is important to seek independent legal and business advice before making that substantial investment.

“Prospective franchisees need to ensure they are aware of a range of key ongoing costs associated with running the business such as wages, rent and inventory.”

The Franchise Disclosure Registry is scheduled for release in early 2022. There will be a transition period to allow franchising businesses to understand the new requirements before the registry is mandated.

Anyone involved in a franchise dispute under the Code is encouraged to contact ASBFEO for assistance on 1300 650 460 or email info@asbfeo.gov.au

Franchising Code reforms help level playing field for franchisees

admin — Fri, 10 Dec 2021 03:31:28 +0000

Franchising Code reforms help level playing field for franchisees admin Fri, 12/10/2021 - 14:31

01 June 2021

The Australian �Թ�� and Family Enterprise Ombudsman Bruce Billson says the significant reforms to the Franchising Code of Conduct announced by the Australian Government today will help level the playing field across the franchising sector.

Mr Billson says the reforms to the Code, which come into effect from 1 July 2021, will go a long way to addressing the power imbalances that often exist between franchisees and franchisors, particularly when disputes arise.

“These reforms are an important step towards getting the balance right for our small and family businesses in the franchising sector,” Mr Billson says.

“In particular, providing greater powers to my office to appoint an independent arbitrator when both parties agree, will help resolve disputes in a cost-effective and timely manner, while crucially protecting business relationships. This supports a no-surprises, collaborative and mutually respectful commercial relationship between franchisees and franchisors.

“Allowing my office to facilitate group mediation when several franchisees are in a similar dispute with the same franchisor, is another critical reform that will help restore confidence in this sector.

“The changes to the Code mean prospective and current franchisees will be better armed with vital information needed to run their business.

“This includes more transparency around the marketing fund, with an annual financial statement which sets out meaningful information regarding expenditure. Greater visibility around rebates and leasing arrangements will be achieved by these reforms.

“The new mandatory Franchise Disclosure Registry, which is scheduled for release in early 2022, is key to providing prospective franchisees with vital information needed prior to entering a binding franchise agreement.

“Over the past six months my office has fielded over 240 calls from franchisees seeking information regarding disputes under the Franchising Code of Conduct.

“This demonstrates just how critically important it is for prospective franchisees to know exactly what they are getting into before signing on the dotted line.

“Ultimately these much-needed reforms to the Franchising Code of Conduct will play an important role in making Australia the best place to start, grow and transform a business.”

Anyone involved in a franchise dispute under the Code is encouraged to contact ASBFEO for assistance on 1300 650 460 or email info@asbfeo.gov.au.

Ombudsman welcomes faster payment times for small business sub-contractors

admin — Fri, 10 Dec 2021 02:42:06 +0000

Ombudsman welcomes faster payment times for small business sub-contractors admin Fri, 12/10/2021 - 13:42

01 October 2021

Businesses with Commonwealth government contracts will have to pay their small business sub-contractors within 20 days or risk fines and penalties under new laws starting today, says the Australian �Թ�� and Family Enterprise Ombudsman, Bruce Billson.

“Fair payment times are incredibly important for the viability of small businesses, and I welcome the beginning of this significant policy,” Mr Billson said.

Under the Payment Times Procurement Connected Policy introduced by the Federal Government, large businesses with Commonwealth government contracts of over $4 million are required to pay their small business sub-contractors of up to $1 million within 20 calendar days or pay interest.

Importantly, they must also take reasonable endeavours to ensure smaller businesses throughout the supply chain of their contract are paid on time by other sub-contractors.

Under this policy, where disputes arise, small and family businesses will now be able to lodge a complaint through the Treasury at ptpcp@treasury.gov.au

Businesses can also contact the Australian �Թ�� and Family Enterprise Ombudsman for guidance and support on how to navigate the process at https://portal.asbfeo.gov.au/dispute or /contact-us

“Challenging large businesses payment practices can be daunting for smaller businesses. I always encourage an initial conversation between the parties to try to resolve a dispute,” Mr Billson said.

“But if this is difficult, my Office is here to provide support and guidance to try to resolve your dispute.”

The Australian �Թ�� and Family Enterprise Ombudsman’s website www.asbfeo.gov.au has a more detailed fact sheet on the Payment Times Procurement Connected Policy and the ‘5 steps to resolve your dispute’ tool to assist with ways to manage this process.