WILL THE SOUTH AUSTRALIAN SMALL BUSINESS COMMISSIONER BILL REALLY MAKE ANY DIFFERENCE? There seems to be some hysteria building surrounding the introduction of the Small Business Commissioner bill in South Australia. But is the bill really going to make any difference to the way franchising is conducted? Probably not! In the past few days there has been some rather emotional comments and articles by franchise consultants and others about the introduction of this bill. One even referred to it as “deceptive” and “franchising legislation by stealth” and another who we spoke to as “appalling”.
It’s hard to say. None the written comments I’ve seen have been able to provide an adequate answer.
So what is the big issue here?
Though for reputable franchisors that do not breach the Code this is moot.
First, there does not appear to any additional compliance requirements, nor any local licensing or special disclosures. Second, unless a franchisor breaches the Franchising Code of Conduct there is no penalty applied or case to be answered under the proposed bill. In other words, reputable franchises have absolutely noting to fear from it. It is just business usual. So why are these people so dead against this bill?
24 | Modern Franchise Magazine
One possibility is that it is unclear at this stage if a franchisor breaches the Code whether they could face both state and federal penalties.
In fact the only reasonable objection is that the majority of participants in the franchise sector favour a single national approach to franchise regulation. But the answer is dead simple Don’t Breach the Code! It seems that the only issue here is if a franchisor breaks the law. If franchisors break the law they should expect to get penalised. So what is the real issue? Why are these franchise consultants so upset?
And the FCA has vowed to block the South Australian Government's Small Business Commissioner Bill, claiming it would create a "de facto" franchising code. Then there are some who say the bill doesn’t go far enough. They say it still doesn’t tackle the issue of good faith in franchising - the “fair go” legislation being pushed by the National Franchisee Coalition. It seems like no one is really happy! (This might mean they have got it right). Some see it as a starting point for better protection for small business, others fear its consequences. The reality is it really doesn’t effect the majority of franchises, it just puts the less reputable ones on notice!
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