MORE LEGISLATION could impact on franchising

The reform covers the Fair Trading Act, the Consumer Guarantees Act, and the Weights and Measures Act, the Layby Sales Act, the Unsolicited Goods and Services Act, the Door to Door Sales Act and the Auctioneers Act. It also considers aspects of the Carriage of Goods Act and the Sale of Goods Act.

Each piece of consumer law is being reviewed, looking at:

• its history and original purpose
• its ongoing relevance and, if still relevant, whether it is sufficiently up to date for consumer transactions of today
• any gaps in the law and the overall effectiveness of the law particularly its enforceability.

The objectives of the review are:

• to have in place principles-based consumer law
• to achieve simplification and consolidation of the existing law
• to achieve harmonisation with the Australian Consumer Law, as appropriate, in accordance with the government’s agenda of a single economic market with Australia (SEM).

The Franchise Association has expressed its concerns over a section within the discussion document related to ‘Possible Additional Selling and Duress Provisions’ that includes extensions to commercial law already enshrined in the Fair Trading Act. According to FANZ, franchising was specifically mentioned by the officials as a business sector where these proposals may be applicable.

‘Of specific concern to us is the potential development of "Good Faith", "Unconscionable Conduct" and "Oppressive Conduct" provisions into franchise agreements and how these might impact on member franchise systems who are already operating within our Codes and Rules,’ reports FANZ Executive Director Graham Billings. The Ministry of Consumer Affairs is inviting feedback and submissions on the Discussion Paper by 30 July 2010. Supporting oral submissions may be made during August. Read the full Discussion Paper here.