Franchise Disclosure Registry set for 2022
A Franchise Disclosure Registry will be unveiled next year by the Federal Government, Josh Frydenberg revealed in last week’s Budget.
The Franchise Disclosure Registry will be publicly available and is scheduled for release in early 2022. There will be a transition period to allow franchising businesses to understand the new requirements before the registry is mandated.
The Minister for Employment, Workforce, Skills, Small and Family Business, Stuart Robert, said the Government’s $4.3 million spend over four years to introduce the registry will “increase transparency and restore confidence in the sector”.
It’s a move welcomed by Australian Small Business and Family Enterprise Ombudsman (ASBFEO) Bruce Billson.
“There is a clear need of greater awareness in the franchise sector and this registry will certainly help restore confidence in this sector,” he said.
“My office has advocated strongly for the implementation of this registry to improve transparency of franchise operations, so prospective franchisees are properly informed before signing a franchise agreement.
“Over the past six months my office has fielded over 240 calls from franchisees seeking information regarding disputes under Franchising Code of Conduct.
“This demonstrates just how critically important it is for prospective franchisees to know what they are getting into before signing a franchise agreement.”
Franchise Council of Australia CEO Mary Aldred told Inside Franchise Business Executive funding for a franchise registry to improve the availability of information to prospective franchisees is a welcome move.
“The Federal Government has asked the Franchise Council of Australia to provide input on the formation and structure of the registry as part of the implementation process, and we have been in ongoing consultation with Small Business Minister Stuart Robert as part of this,” said Aldred.
“The Government has assured the FCA that there will be further discussion on draft regulation to support the registry. This includes ensuring that the registry can provide appropriate treatment of franchisors’ commercially sensitive information so that franchise businesses are not placed at a competitive disadvantage to non-franchised competitors operating in the same industry.
“As part of this and the broader Franchising Code of Conduct reforms, it is essential that franchise businesses have appropriate lead time to update their systems and implement changes to ensure compliance with new requirements,” she said.
Aldred said the FCA is encouraged by the Government’s commitment to undertake an extensive education and engagement process to inform and support the sector’s transition to the registry.