Release type: Media Release

Date:

Morrison Government backs Australian small businesses through tougher Franchising Code of Conduct Penalties

Ministers:

The Hon Stuart Robert MP
Minister for Employment, Workforce, Skills, Small and Family Business
Acting Minister for Education and Youth

The Morrison Government is delivering on its commitment to lifting standards of conduct in the franchising sector and today announces that penalties have been increased for breaches of the Franchising Code of Conduct.

These increased penalties will provide a strong deterrent against breaches of the Code and prevent non-compliance from being factored into the cost of business, particularly by large multinational franchisors that seek to take advantage of small business franchisees.

The maximum penalty available for breaches of certain provisions, including those targeting the automotive sector, will increase to $10 million (or 3 times the benefit gained, or 10 per cent of annual turnover) for corporate bodies and $500,000 for unincorporated bodies. Penalties for other provisions in the Franchising Code of Conduct have been doubled to 600 penalty units ($133,200).

Minister for Employment, Workforce, Skills, Small and Family Business, Stuart Robert, said the changes once again demonstrated the Morrison Government puts small businesses first.

‘Whether it’s cutting red tape or dropping taxes, or bringing in tougher pentiles to level the playing field the Morrison Government will always put small businesses first—be under no illusion our political opponents would unwind all the good work we have achieved to date,’ he said. 

‘We will continue to protect hardworking Australian franchisees from being taken advantage of by poor practices and conduct,’ Minister Robert said.

‘These multinational franchises need to know that we stand up for our small and family businesses.’

The Government has already implemented extensive reforms to the Franchising Code of Conduct. The Government’s 2021 franchising reforms will improve access to information for franchisees and prospective franchisees, and are better balancing the rights of franchisors and franchisees, and improving access to justice for small business franchise operators.

The franchising industry is worth $155 billion to the national economy and employs over 500,000 Australians across a range of industries.

Further information regarding the new penalty provisions can be found at www.legislation.gov.au/Series/F2014L01472/Amendments.