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Monday, 17 August 2009
Page: 8084


Mr RIPOLL (7:20 PM) —Firstly, I would like to say it is great to see people in this House actually taking an interest in franchising and I congratulate all those involved. I think it is a bipartisan issue and a matter which is serious and important. It is one about which all members of parliament, in one form or another, have genuine concerns and views and they are all heading in the same direction. We all want to improve franchising and we all believe it is a good, strong, business model. It involves a whole heap of ordinary mums and dads, mostly, but generally people who are involved in small business and have taken that very big risk not just to employ themselves but to start a small business in a unique partnership with someone else. It can be a very difficult partnership and it has often been referred to in the franchising world as almost like a marriage—a partnership that can be very good and fulfilling but also one that can be very complex, especially when the marriage may get into strife and there needs to be some sort of a separation.

Franchising in this country is about 30 years old. It started in America, came to Australia and went through an evolutionary period in this country, where there were no rules. There was just common law, the law of contract and so forth. It was almost a laissez-faire type environment. It was not big; it was only just beginning. That progressed through a regulatory regime where successive governments saw the need to regulate, to provide a better environment—some consumer protection and so forth—to people in franchising, including franchisors, as well as to consumers. That has evolved from voluntary codes of conduct to mandatory codes of conduct, to what we saw in the Matthews review and in franchising reviews in Western Australian and South Australia—a whole range of jurisdictions were taking an interest. All of that culminated in what we ended up seeing in the Commonwealth parliament since the election of the Rudd government; that is, a full review. I have to say it was well supported by the opposition as well. It was a review of the overall franchising environment and it has led to the system that we find ourselves with today. It is a good system and I think we all agree with that, and that is what the reviews have found. But it does have some problems. It is not a perfect system.

I and the rest of my committee were very conscious that, in developing our eleven recommendations and in looking at what could be done, we needed to employ a carefully thought out, properly structured, strong process. It would need to hear the views of everyone involved in franchising, from the representative peak bodies—who may have a particular view—to people who have had good experiences and those who have had shocking experiences, as we have heard many times in this place. We all have those constituents and we all want to do something for them. I congratulate the minister, which is very much different to some members. The minister, the department and the committee have been working through a distinctive process to try and come to a workable, feasible outcome that is acceptable to the sector, acceptable to the people who have put their money on the table and risked their own capital—the franchisees—to provide something that in the end will benefit all.

Some may say that this has all gone a bit slow. I disagree. I think we will soon see the fruits of that process and the benefits from giving proper consideration to the situation we are dealing with. The committee was very conscious of the need to make good, sound, solid recommendations, because we all understood the need to get the right balance between regulation—and the cost of regulation—and allowing franchisees and franchisors to go about their own business, to follow the terms and agreements within their own contracts. We all support that but there is abuse in the sector by some and that needs to be dealt with. We need to find proper mechanisms. There has been good development over the years; we just need to take the next progressive logical step. We identified a number of key points in the report. I will not go through all of them but I think it is important to acknowledge the pre-contractual agreements about disclosure and the proper giving of information, particularly regarding end-of-franchise agreements.

A big issue for the committee was the good faith provisions. I will not get political in the short time that I have but I do have to say that the previous government actually rejected this particular view when it came before them only recently. We should all give some consideration to where we need to go to provide the right regulatory environment. We need to find a solution for end-of-contract agreements. I agree with the member for Gilmore in terms of harsher penalties for those that do the wrong thing—and in the end that is what we are striving to implement. I am very supportive of the report my committee presented and I am very supportive of what the minister and the department are doing in cooperation and partnership with the industry.


The DEPUTY SPEAKER (Hon. DGH Adams)—Order! The time allotted for this debate has expired. The debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting.