REGULATION - COMING SOON?
March 2008 - Following the recent publicity given to the Green Acres and Green Power franchise problems, attention has now turned to the possibility of introducing regulation of the franchise sector in New Zealand.
As we reported in our special edition email newsletter Franchise NewZ in Februrary, the Franchise Association came out with a statement in favour of regulation after Commerce Minister Lianne Dalziel asked the Association to make a submission to the Select Committee currently considering the Finance Service Providers Bill.
The Association's statement caused concern among some members who felt they had not been adequately consulted. However, after being granted an extension of the submission deadline, the Association was able to host a discussion meeting in Auckland attended by 40 members. A survey of all members is also planned.
In the next issue of Franchise New Zealand magazine (published 28 March) we talk to the Minister of Commerce and outline the options she is considering and the concerns raised by those who attended the Auckland meeting. In brief, it seems as if franchising will not be specifically included in the Finance Service Providers Bill; that the Minister has an open mind on whether franchise regulation is needed; and that if regulation is brought in, it is most likely to be handled in a separate Bill (which would of course attract its own submissions).
The good news is that the whole issue is so far being handled in a sane and sensible manner by all involved. The majority of those who spoke at the Auckland meeting were in favour of enlightened regulation, and feedback so far received by the Association from non-attendees has apparently also been overwhelmingly positive. Rumours published in an Australian journal that the franchise industry in New Zealand was ‘split' over the issue appear to be somewhat exaggerated. Concerns certainly exist, as our article will detail, but as Stephen Giles, the former chairman of the Franchise Council of Australia, advised the meeting, the more pro-active and unified the franchise sector can be in considering regulation, the better the outcome is likely to be for all concerned.
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