South Australian MP considers bill to weed out franchising rogues

South Australian Labor MP Tony Piccolo says he will consider introducing a private members’ bill into South Australian Parliament if Federal Labor Small Business Minister fails to reform the Franchising Code.

Late last week, the South Australian parliament unanimously voted in favour of Piccolo’s private members’ motion, calling on the Government to respond to an inquiry into the Franchising Code conducted last year by a joint Federal Parliamentary committee.

The Joint Standing Committee on Corporations and Financial Services inquiry into the sector delivered its bipartisan report on 1 December, 2008. It contained 11 recommendations including the introduction of a “good faith” provision into the Code and improved dispute resolution processes.

But Emerson is yet to formally respond to the report. He released an issues paper in June and had promised his response would be delivered by the end of July.

But a spokesman for Emerson told SmartCompany this morning there is still no firm date for the release of the response. “It’s still in the works.”

Piccolo is not impressed.

“We certainly want to let the Government know that the matter is still on the South Australian Parliament’s agenda,” he says.

“There is quite a bit of anger out there because there are whole chains of franchisees that are hurting at the moment and getting frustrated because they don’t understand the delay.”

If Emerson does not respond by 1 December this year, Piccolo plans to introduce a private members’ bill into South Australian Parliament. He is meeting with experts this week to talk about the drafting of this bill and acknowledges this will be a difficult process, given Commonwealth law governs much of the sector’s activity.

“It’s a matter of figuring out where we can intervene to make a difference,” he says.

The private members’ bill will focus on the introduction of a good faith provision and improved dispute resolution processes. Piccolo is particularly concerned with so-called end of term arrangements that have caused much controversy in the sector and are the source of many disputes. He would also like to see new regulations that would require franchisors to publish more information about their operations.

“These are not things that would bog the industry down – they will make the industry stronger by weeding out the operators who are in there to make a quick buck,” he says.