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Franchise Brief

19 January 2011

From the CEO

FCA News

Franchise dispute resolution advice


Problems and conflict can occur in any commercial relationship, and franchising is no different.

Where franchise problems and conflict occur in franchise relationships, franchisors and franchisees should first attempt to resolve the issue before referring to an external agency.

A normal dispute resolution procedure will at first attempt resolution informally, then by a formal written notice which will generally include the nature of the dispute, and desired outcome to resolve the dispute, and a timeframe for this to occur.

In Australia, under the Franchising Code of Conduct, serious disputes that cannot be resolved between the franchise parties themselves, should be referred to mediation.

Office of the Mediation Advisor


The Australian Office of the Mediation Advisor was created to assist franchisors and franchisees appoint a mediator if they could not otherwise agree on one between them.

Once a party has made a request for mediation, it is a contravention of the Australian Franchising Code of Conduct for the other party to refuse to mediate, however there is no requirement under the Code for a mediation to result in an agreed outcome, whatever the franchise problems may be.

Mediations referred through the Office of the Mediation Advisor have a settlement rate of approximately 75 percent, which means an outcome to the dispute that is acceptable to both parties has been reached.

Mediation versus litigation


According to statistics from by the Office of the Mediation Advisor, the cost of mediation is understood to be as little as five to 20 percent of the cost of litigation.

Not only are the costs of mediation lower than litigation, but the process of mediation is much less confrontational and much quicker than litigation – the end result of which is outcomes to franchise problems are achieved sooner and at a lower cost.

Avoiding franchise problems


Not all franchise problems and disputes need end in mediation or litigation. A major characteristic of excellent organisational leadership is the ability to resolve disputes.

Good franchise businesses will have sound in-house processes to amicably resolve franchise problems with minimum disruption to the franchise businesses of either the franchisee or franchisor.

New Year Brings Change for Small Business

Small Business Minister, Senator Nick Sherry, is urging small business operators to get to know their rights and responsibilities under new laws and procedures that have taken effect from 1 January 2011.

These include changes to industry codes on fair conduct, the definition of what is a small business employer for unfair dismissal provisions and the introduction of the paid parental leave scheme.

“The new Competition and Consumer Act puts in place tougher enforcement powers that apply to all industry codes, including the Franchising Code of Conduct,” Senator Sherry said.

The new powers applying to all industry codes include:

* public warning notices for serious code breaches;
* random audit powers for the Australian Competition and Consumer Commission;
* provision for courts to make orders in favour of persons who are not party to the relevant proceedings; and
* substantiation notices for claims made in franchising transactions.

In addition, as of 1 January 2011, the unconscionable conduct provisions of the Australian Consumer Law are enforceable in state and territory courts and tribunals.

National, state and territory regulators also have a larger arsenal of investigation and enforcement tools for breaches of fair trading laws under the Australian Consumer Law, including infringement notices, civil pecuniary penalties and disqualification orders.

These are in addition to powers that already exist under the Competition and Consumer Act (2010), which replaces the Trade Practices Act 1974.

“These powers introduced on 1 April 2010 include court ordered injunctions to stop rogue franchisors in their tracks and financial penalties for parties engaging in unconscionable conduct or making misleading representations,” Senator Sherry said.

New Definition of Small Business Employer

Changes from 1 January 2011 include a new definition of small business employer for the purposes of unfair dismissal laws.

A small business employer will no longer be a business with fewer than 15 full-time equivalent employees, but a business with 15 employees based on a simple headcount.

“This change makes it easy for small business to understand if they are a small business for the purposes of unfair dismissal law,” Senator Sherry said.

Paid Parental Leave Scheme

“The Government’s Paid Parental Leave scheme is also effective as of January 1 – with a six-month phase-in period for employers,” Senator Sherry said.

Eligible working parents of babies born or adopted from 1 January 2011 will receive 18 weeks’ Parental Leave Pay at the National Minimum Wage – currently $570 a week before tax.

Payments will commence on 1 January 2011, but employers will only be required to provide Parental Leave Pay to their eligible long-term employees who have a baby or adopt a child on or after 1 July 2011.

“This six month phase-in of the employer role will allow employers and businesses additional time to set-up the appropriate mechanisms to provide Parental Leave Pay to their employees,” Senator Sherry said.

“Employers can choose to participate in the scheme earlier if they want to.”

“This will be the first time many small businesses have been able to offer this entitlement to their employees, helping them retain skilled staff.”

A summary of recent regulatory changes to the Franchising Code of Conduct can be found on the Australian Competition and Consumer Commission’s website at: www.accc.gov.au.

More information on the Australian Consumer Law can be found at: www.consumerlaw.gov.au.

State News

Queensland, NSW and WA


Many FCA Members have been affected by the recent flooding in Queensland, Northern NSW and Western Australia. Our thoughts are with you all.

Primary online information resources:
QLD www.qld.gov.au/floods
NSW www.bom.gov.au/hydro/flood/nsw
WA www.bom.gov.au/hydro/flood/wa

For information on Special disaster flood assistance grants, staffing issues, workplace health and safety:
QLD www.business.qld.gov.au/risk-management/flood-business-assistance.html
NSW www.dpi.nsw.gov.au/agriculture/emergency/flood
WA www.fesa.wa.gov.au/internet/default.aspx?MenuID=376

The CPA Australia website's Disaster Recovery Toolkit for Business is also an excellent resource based on practical experience in rebuilding after the Victorian bushfires.

More information will be available within the next few days and weeks. We will pass it on as soon as it arrives.

Thanks again to Ralph Edwards and his team in the FCA Queensland Chapter.

If you would like to help, or make some kind of donation to the relief effort
QLD www.qld.gov.au/floods/donate.html
QLD and NSW https://salvos.org.au/donate/secure-online-donations
WA www.appealswa.org.au/currentappeal.html

Education

Events


 NSW
8 Feb Board Meeting
8 Feb Breakfast: NAB Economy Update

 Qld
8 Feb   Board Meeting
17 Feb Round Table
24 Feb Breakfast: NAB Economy Update

SA
2 Feb Breakfast: NAB Economy Update
8 Feb Board Meeting

VIC
8 Feb   Board Meeting
9 Feb   Breakfast: NAB Economy Update
16 Feb Round Table

WA
1 Feb Round Table
3 Feb Breakfast: NAB Economy Update
8 Feb Board Meeting

Awards


State Franchising Awards

Entries for the Regional Franchising Awards are already open and close 1 March 2011.


Regional Categories

Franchisee of the Year < 2 staff
Franchisee of the Year > 2 staff
Multi-Unit Franchisee of the Year
Franchise Woman of the Year
Field Manager of the Year
Franchisee Community Service

Award Criteria
Key Dates
Submit Entry Form


Once we receive your entry form and process payment, you will be sent a submission kit to start you on your Awards journey.

Many of the 2010 Award winners have received priceless coverage in the media - both for their franchise store, their staff and their brand.

Visit the Awards website or contact the FCA on 1300 669 030 or awards@franchise.org.au for more information on the awards.


Franchising in the Media


Business outlook robust despite consumer apathy


DUNN & BRADSTREET INTERNATIONAL 11/01/11
Australia’s economy is becoming increasingly resilient to consumer apathy as firms engaged in business-to-business trade and those exposed to the emerging economies of Asia keep the domestic economy powering ahead even while retailers struggle to convince consumers to spend. These are the emerging trends from the latest Dun & Bradstreet Business Expectations Survey which show near record expectations for sales, profits, capital investment, employment and inventories even while retailers report some of their most difficult circumstances for years.
From CCH Parliament National Daily Headlines 12 January 2011

RAMS breaks the myths about refinancing


RAMS HOME LOANS 11/01/11
RAMS Home Loans today revealed many Australians are breaking the myths about switching home loans and refinancing to a better deal. Principal of RAMS Brisbane North East, David Grey said there is a growing trend to refinance an existing mortgage to another lender who can offer a home loan to better suit their financial needs. Traditionally, borrowers often stayed with the same lender for the life of the loan. However, people are now taking greater control of their finances by shopping around and exploring new options to meet their changing personal circumstances, Mr Grey said. There are currently many options available to borrowers including whether to choose a fixed or a variable rate, select different products and even change home lenders.
From CCH Parliament National Daily Headlines 12 January 2011

Epsilon to serve up personalized service for Domino’s Pizza


Preferred pizza flavours, soft drink purchases, times to order, location and other targeted customer factors will be utilized by Epsilon to deliver personalized offers for Domino’s Pizza. Epsilon, marketing services firm, has formed a partnership with Domino’s Pizza to deliver, with the DREAMmail email platform, personalized marketing communications with customers and franchise owners. Read more.

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