Oz national Franchise Inquiry

Deanne de Leeuw has been a very effective advocate for the problems that afflict Australian franchise investors. Her efforts should be commended and supported by everyone because franchise law is truly an international affair.

Similarly, BakersDelightLies.com deserves everyone’s appreciation, as well. Without focusing efforts and co-operating, franchisees will never be able to utilize the information that is available which can be used to counteract the overwhelming economic advantage of the adversary.

God is not on the side of the big battalions, but on the side of the best shot. Voltaire.

Blue MauMau is an important resource for those wishing to increase their knowledge about franchising. Deanne posts there to keep North American readers informed. I would encourage every national group to do this. If you want help, talk to those who have decades of experience.

The national inquiry notice was posted on Blue MauMau recently: Australian Government Announces Inquiry into Franchising. This is the entire posting.

On 25 June 2008 the Australian Federal Parliament Joint Standing Committee on Corporations and Financial Services resolved to inquire into the Franchising Code of Conduct and related matters.

This follows the recent State inquiries held in Western Australia and South Australia.

The terms of reference are:

The Committee is to inquire and report on the operation of the Franchising Code of Conduct, and to identify, where justified, improvements to the Code, with particular reference to:

1. the nature of the franchising industry, including the rights of both franchisors and franchisees;

2. whether an obligation for franchisors, franchisees and prospective franchisees to act in good faith should be explicitly incorporated into the Code (having regard to its presence as an element in paragraph 51AC(4)(k) of the Trade Practices Act 1974);

3. interaction between the Code and Part IVA and Part V Division 1 of the Trade Practices Act 1974, particularly with regard to the obligations in section 51AC of the Act;

4. the operation of the dispute resolution provisions under Part 4 of the Code; and

5. any other related matters.

The Committee invites submissions by 12 September 2008. The Committee will report by 1 December 2008.

Please send submissions to corporations.joint@aph.gov.au or by post to –

Committee Secretary
Parliamentary Joint Committee on Corporations and Financial Services Department of the Senate
PO Box 6100 Parliament House
Canberra ACT 2600

Emailed submissions should include full name, address and phone contact details so that they can be verified.

For further information please contact the committee secretary on (Australia) 02 6277 3583 or at corporations.joint@aph.gov.au

Oz McLaw is important because this is the first national legislative push since the formation of the Blue MauMau Web 2.0 community. The world’s resource [both sides] will be looking down under and applying whatever pressure they can to forward their interests.

Political Childlike Thinking: Some people believe that simply telling their story on paper or in person to a politician is enough to get an effective law [ie. a lack of knowledge is the problem and the truth will, by itself, win out]

  • It isn’t. It never has been. And it never will be where modern politics is a brokering of competing interests.

The disciplines of social science such as political science and law are about power as much as physics is about numbers.

Politicians and regulators know infinitely more than you know and will still do nothing, even after the blood runs out of the media reports. 40 years of North American experience proves it. Trying to shame or out-muscle Big Franchising is a fool’s game.

Better Risk Assessment: The solution is the development of an educational tool that would digitize the knowledge of a 20-year franchise law expert inside an expert system software program.

The reaction of the franchise bar proves that this approach will solve the abuses by accurately showing the breadth and depth of business risks of investing in a franchise.

If the risks were accurately revealed to you before you signed:

Who but a fool would sign a contract that gives the franchisor a License to Lie, Cheat & Steal ?

Benefit: Over 1,500 documents [so far], from around the world which have been indexed to teach. A franchising Google.

Cost: Free to anyone who wants it.

Interested? Give me your physical address and I’ll mail you a CD with the Access 2000 file [30 mb]. Want to write some code to take this onto the web for everyone?: drop me a line. Let’s Wiki.

One Response to Oz national Franchise Inquiry

  1. Carol Cross says:

    If you can admit that most franchisees who buy retail franchises are not investing but looking for a job and income, you understand that it is not difficult at all for the franchisors and their agents to convince prospects in the sales process that there are “awarding” you something of great value that will answer your need.

    In Deanne de Leeuw’s case, she, a wealthy woman, she was approaching the investment in Baker’s Delight as an investment and a good place to put her money. She and her attorneys were fooled by the visibility of Bakers Delight that translated to viability in their eyes.

    The big franchisors who earn their visibility through churning can therefore fool even sophisticated investors.

    Franchisors become even more predatory and abusive because they are protected in the courts because of the adhesory contracts in which the franchisee must acknowledge that they have bought the franchise at 100% risk of failure and that they were promised NO profits and NO success.

    The misuse of the law and process and procedure to hold up franchising and to protect franchisors is the real danger to democracy and free Republics, in my opinion.

    Why shouldn’t franchisors be mandated to disclosure the unit performance statistics in their possession to new buyers of their franchises?

    Like

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