How much would franchise regulation cost?

The symposium on franchise law reform later this month comes at a time when research in Australia has suggested that the cost of complying with amendments to regulation last year cost franchisors more than $9 million in legal fees alone. The research, by market intelligence organisation 10 Thousand Feet, suggests that 49% of franchisors surveyed incurred legal costs of $5000 or less, with 7% incurring costs in excess of $50,000.

In addition to legal costs, 40% of franchisor pinpointed increased administration time as the major impact the changes to the code had on recruitment processes, while 17% stated that it now takes longer for new franchisees to start operating. Only one-third of the more than 100 franchisors surveyed said that changes hadn't affected recruitment processes at all.

And with still more reforms of the Australian legislation in the pipeline , is any any wonder that one prominent New Zealand franchise lawyer, on hearing about the extra $9 million legal fees paid last year, joked, 'Franchise legislation for New Zealand? Bring it on!' It will all be food for discusson at the symposium to be held on 25 June at the University of Auckland Business School. Click here for full details.

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