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Why SA's proposal to regulate franchising is impractical

Written on the 5 October 2010 by SmartCompany

The recent announcement by South Australian Small Business Minister Tom Koutsantonis that SA will push ahead with specific legislation to regulate franchising beyond the existing provisions of the Federal Franchising Code of Conduct should trigger alarm bells for the sector nationally.

There are no state-specific issues for franchising at play that justify the intervention of a state government. Franchising as a method of doing business transcends state borders, which is perhaps why the proposed legislation which Koutsantonis has stated will be the template for the new laws has all the makings of a new - albeit de facto - national regulatory framework for franchising.

Koutsantonis, who was the chairman of the 2008 South Australian Economic and Finance Committee which conducted a state-based inquiry into franchising, has publicly lauded the work of his fellow former committee member, state MP Tony Piccolo, for continuing to champion the cause of franchise reform even though changes to the Franchising Code of Conduct were implemented by the federal government on July 1 this year.

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Author: SmartCompany

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