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ASSOCIATION APPEALS FOR INFO
TO HELP ADDRESS CARTELS LEGISLATION

by Simon Lord,
last updated 15/10/2013

in this article:

15 October 2013 – The Franchise Association is urgently seeking information from franchisors to help representations to the Commerce Commission on anti-competitive legislation.

Last week, the Commerce Commission held two briefing sessions to announce their draft guidelines that are proposed to become part of the implementation of the Commerce (Cartels and Other Matters) Amendment Bill later this year (see previous article).

Graham Billings, the Executive Director of the Franchise Association of New Zealand (FANZ), reports that the presenters made specific reference to the submission made by FANZ on the implications for franchising. The Select Committee on the Bill has instructed the Commerce Commission to ensure that there are specific guidelines created for the franchising sector.

A copy of the draft guidlelines can be accessed through clicking this link:

DRAFT COMPETITOR COLLABORATION GUIDELINES - OCTOBER 2013

The section on franchising appears at the back in Chapter 9 (pages 46-49). Aspects covered include:

  • Geographic or customer market allocation;
  • Pricing of products or services, especially terms where the franchisor sets or recommends prices to be charged by franchisees; and
  • Restrictions on the type or quantity of product.

‘It is clear that there are some activities where such franchise arrangements might be subject to the cartel provisions and exemptions may need to be applied for,’ says Graham. ‘Examples might be where the franchisor is in competition with a franchisee through a company-owned store operating in the same area, or where a franchisor's web site is seen to compete with its franchisees.

‘FANZ has have been offered one-on-one meetings with the Commission next month to discuss further their proposed application of the guidelines. In order that we can represent the key issues that franchisors see as creating difficulties, I ask everyone – members and non-members alike - to read through the document and let us have information on such issues.

‘I would appreciate it if you could get any comments back to me by Friday 25th October so that we will have time to collate them. If there are any issues you want to raise directly, please contact me or any member of the Board.

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