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Families ‘ripped off’ by ‘shonky and dodgy’ franchisors

Oliver Peterson
Article image for Families ‘ripped off’ by ‘shonky and dodgy’ franchisors

A bill passed the Senate today which calls for urgent changes in the Franchise Code. The $180 billion industry came under fire in 2019 after a parliamentary inquiry made over 70 recommendations needed to overhaul the business model.

The inquiry found franchising “exhibits a substantial disparity in power between franchisors and franchisees” and “the current regulatory environment has manifestly failed to deter systemic poor conduct and exploitative behaviour and has entrenched the power imbalance.”

However, the Federal Government has not acted to implement the recommendations, with Labor Senator Deborah O’Neill telling Oliver Peterson she “couldn’t wait any longer” so she introduced the “Fairness in Franchising Bill.”

Senator O’Neill claims the Federal Government’s failure to act shows they don’t support small business.

“So many small businesses and family groups that have put their money together and gone into franchising have just been ripped off by shonky and dodgy franchisors.

“They have all the money and the power and are selling them a business they know is not going to work.”

The bill aims to increase penalties to $10 million and give the Small Business Ombudsman more power.

“There’s some protection in this legislation that the government should get on with and implement to protect businesses,” said Senator O’Neill.

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Oliver Peterson