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Is this good news? ACCC reports significant drop in the number of franchising complaints

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By Esther Gutnick, Senior Associate, MST Lawyers

The bi-annual “Small Business in Focus” report number 13 was released on 25 January 2017 by the Australian Competition and Consumer Commission (ACCC) in relation to the period from July to December 2016.

The ACCC’s report provides an overview of the regulator’s activities and key issues in the franchising, small business, and agriculture sectors over the preceding 6 months.

This latest report shows fewer franchising-related complaints and enquiries having been referred to the ACCC in the second half of 2016, continuing the trend of reduced complaint numbers since the introduction of the revised Franchising Code of Conduct (“Code”) in January 2015.

Previous reports indicated an initial spike in complaint levels immediately following the commencement of the new Code, with the ACCC receiving an average of 52 franchising complaints per month for the first six months of 2015. However, since then, the numbers of reported grievances have been steadily declining, with an average of only 32 complaints per month being received by the end of 2016. This fall in numbers diverges from the statistics relating to overall ACCC complaint levels, which have, according to the report, increased over the same 2 year period.

The report also provides updates regarding other key developments in the previous six month period, including a summary of significant enforcement actions undertaken by the ACCC and a synopsis of changes to relevant legislation and activity in the reported industries.

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