Franchising is big business in Australia and by 2007 there were over 850 franchise systems in Australia engaging about 61,860 Australian small businesses, made up of 56,200 franchisees and 5,660 company owned outlets. This represented about 5.5% of 1.1 million small businesses in Australia. By comparison, in the US about 3.2% of small businesses are franchises.
Franchising has grown strongly since 2002 and has been predicted to be the predominant form of sales distribution by 2012, though this may be optimistic. By 2006, franchising represented 2.5% of Australian employment, compared to about 3% in the US but only about 0.55% in the UK.
Franchise disputes involve commercial issues and come within the equitable jurisdiction of the Courts invoking equitable issues such as good faith and unconscionability, the statutory obligations arising under the Trade Practices Act 1974 (Cth), and regulation of the franchise industry. The first step in a franchise dispute is mediation under the Franchise Code.
A franchise agreement includes a written, oral and implied agreement: by which the franchisor grants the franchisee the right to carry on the business of offering, supplying or distributing goods or services in Australia; under a system or marketing plan substantially determined, controlled or suggested by the franchisor or an associate; which is substantially or materially associated with a trade mark, advertising or commercial symbol owned, used or licensed, or specified by the franchisor or its associate; under which the franchisee must or agrees to pay an amount before starting or continuing the business: for an initial capital investment fee; payment for goods or services; the percentage of gross or net income (eg a royalty or franchise service fee or some other description); training or training school fee.
Members who practice in this area:
