The Albanese Labor Government will strengthen the enforcement of the Franchising Code of Conduct and extend protections from Unfair Contract Terms and Unfair Trading Practices to all businesses regulated under the Code, including automotive dealerships.
The Government is committed to a fair playing field in the franchising sector, which employs around 520,000 people and contributes more than $135 billion to the economy each year.
That's why the Government will provide $7.1 million over 2 years from 2025-26 to strengthen the Australian Competition and Consumer Commission's (ACCC) enforcement of the Franchising Code of Conduct.
This funding will increase its enforcement actions against those who do not act responsibly, and enhance the ACCC's engagement and education activities.
This investment ensures appropriate enforcement of the recently remade Franchising Code, which comes into effect on 1 April 2025.
This includes the relationship between franchisors and their franchisees, many of whom are small businesses.
The Government will also extend protections from Unfair Contract Terms and Unfair Trading Practices to businesses regulated by the Franchising Code, following consultation.
Franchisees may be vulnerable to Unfair Trading Practices given a franchisor controls key aspects of a franchisee's business, such as branding, marketing, supply chains and operational processes.
Unfair Contract Terms and Unfair Trading Practice reforms will help address the power imbalance that franchisees may face and improve the fairness of relationships between franchisees and franchisors.
This will improve the viability of franchising, attracting a broader pool of business talent and encouraging more investment in the sector.
The extension of these protections will progress alongside other work focused on addressing business power imbalances, including the statutory review of the 2022 amendments to the Unfair Contract Terms regime, due to commence later in 2025, and consultation on extending Unfair Trading Practices protections to small businesses.
These actions build on recent reforms to the franchising sector, as part of the Government's response to the Independent Review of the Franchising Code of Conduct by Dr Michael Schaper.
In addition, the Government will prioritise work to count emissions under the New Vehicle Efficiency Standard at the point of sale, rather than when a vehicle is imported to Australia.
Bringing this work forward now, ahead of a fulsome review in 2026, signals the Government's determination to ensure Australian automotive businesses are not adversely impacted by the business practices of international car companies.
Quote attributable to the Minister for Small Business, Julie Collins MP
"The franchising sector is an important sector, employing around 520,000 people and contributing more than $135 billion to the economy each year.
"The Albanese Labor Government is committed to building the long‑term resilience of the franchising sector by introducing considered reforms that address identified harms.
"More active enforcement and compliance work by the ACCC will help target bad behaviours without increasing the regulatory burden for those in the sector already doing the right thing.
"These measures support one of the Government's key small business priorities to level the playing field for small businesses by enabling healthy competition and ensuring small businesses get a fair go."
