Changes Recommended to Australian Franchising Legislation

Incoming Federal Small Business Minister Bruce Billson has indicated that no action will be taken in relation to the Code prior to the end of the year, and that he intends to consult widely before considering any changes. Minister Billson is understood to be broadly supportive of the thrust of the Code recommendations, although in some areas he may consider further reforms to be desirable. An important complicating factor is that Billson has indicated he intends to proceed with legislation to prohibit unfair contractual provisions in standard form agreements. He has refused to rule out the application of such provisions to franchise agreements. No detail has been provided about how such provisions would be enacted. Similar reforms were introduced to the Australian Consumer Law in relation to consumer transactions. It is possible the government might seek to extend the application of these provisions to business transactions, although such an initiative is likely to be widely opposed by the business community.