New changes to the Franchising Code of Conduct, which come into effect on 1 July 2010, have left Franchisors with the task of incorporating onerous amendments to their Disclosure Documents in under 4 weeks. The changes are purported to be for the protection of franchisees and with the aim of providing franchisees with a better understanding of the risks of entering into a franchise.
When buying a franchised business, do not be fooled into believing that you are immune to risk by virtue of having a franchisor looking over your shoulder. Taking on a business is a huge responsibility, irrespective of whether the business is big or small.
Franchisors that breach the Franchising Code of Conduct or promise to do one thing but do something completely different to the detriment of their franchisees, had better take note.
It seems the ACCC is in the process of yet another “crackdown” against Franchisors whose behaviour breaches the Franchising Code of Conduct and the Trade Practices Act 1974.