Franchise Council of Australia

FCA welcomes commercial leasing outcomes for small business

FCA welcomes commercial leasing outcomes for small business

The Franchise Council of Australia has welcomed the Queensland Government’s implementation of the national commercial leasing code. This follows the ACCC’s recent decision to allow tenants to collectively bargain with landlords if they’ve been adversely affected by COVID-19, which has also been welcomed by the FCA.

FCA CEO Mary Aldred says the ACCC’s decision recognising the urgency for retailers and landlords to collectively negotiate rent relief is an excellent outcome following the joint application to the ACCC by the FCA with the National Retail Association, Australian Hotels Association and the Pharmacy Guild.

The FCA had also directly raised concerns with Queensland Small Business Minister Shannon Fentiman that franchisees who had their head lease held by their franchisor may not be covered under the national leasing code principles where the franchisor was above the $50,000 threshold set by JobKeeper eligibility. This meant many franchisees would be excluded from being able to access provisions in the code, such as the proportionality principle, where a drop in turnover caused by the current COVID-19 economic environment should be met by a commensurate reduction in rent.

According to Ms Aldred, Queensland’s implementation of the national commercial leasing code sets out the most balanced and fair playing field for small businesses and franchisees in the country. State parliaments around Australia are currently implementing the national commercial leasing code, agreed to by the National Cabinet process.

“Small businesses have been hit hard by COVID-19 and although restrictions are starting to be eased, the impacts of COVID-19 on individual businesses and the economy nationally will be felt for some time,” says Ms Aldred.

“The ACCC’s decision to allow tenants and landlords to get together and collectively negotiate outcomes that optimise businesses’ ability to meet rental obligations will support their ongoing sustainability. “

“On behalf of thousands of small businesses, we also thank Minister Fentiman and the Queensland Government for being willing to listen to feedback from small business and respond by ensuring there is a fair and level playing field set for everyone. This will give mum and dad small businesses owners in Queensland every shot at making it through the current Covid-19 environment to the other side,” said Ms Aldred.