Inquiry committee pro-franchising; Report on track for December release

A private member’s motion tabled last week supporting further regulation of the franchise sector (see next story) is unrelated to the current franchise inquiry, according to inquiry chairman Bernie Ripoll. “Any private member can move a special motion at any time and this is not related to the current inquiry”, the chair of the Parliamentary Joint Committee on Corporations and Financial Services told Franchise News & Events.

Ripoll maintains the committee will adhere to its December 1 timeframe to complete and table its report to Parliament. “Normally inquiries take a lot longer (but) we need to deal with this expeditiously,” he says, adding that much background work for this inquiry has been covered by the previous state-based inquiries in South Australia and Western-Australia.

“Committee members are bipartisan and work for parliament, not just the government. My hope is that we have a consensus report,” says Ripoll. “We’re all pro-franchising. It’s a great sector and needs support.”

Submissions into the inquiry close tomorrow, September 12, with at least 28 so far received and 21 uploaded to the inquiry website (click here to view submissions). Public hearings will be scheduled for major capital cities with dates and details to be released soon. Click here to see inquiry website.

MP’s call for legislation independent of franchise inquiry

Barely days after the High Court handed-down its decision in the Ketchell case, the franchise sector faces renewed political pressure for increased legislation from Federal Parliament itself. In a private member’s motion tendered in June and debated for the first time last week, eight MP’s spoke about problems in the sector they feel require government intervention.

It may be premature for the franchise sector to congratulate itself on the outcome of the Ketchell case, where the High Court found that a minor technical breach of the Franchising Code of Conduct did not render a franchise agreement illegal. On the one hand, the decision closed a loophole that might potentially have seen franchisees lining up to prematurely exit their agreements, but on the other, was widely seen as a victory for franchisors over franchisees.

The recent franchising motion in Federal Parliament, which includes a proposal to fund cash-strapped franchisees to attend mediation, has not swept in overnight, nor did it originate from the current franchising inquiry, for which submissions close on Friday. It was originally brought by Don Randall, the Liberal Member for Canning, a seat in the outer suburbs of Perth, and has support from both sides of politics. Read full article

Franchisees look to inquiry for support following Ketchell decision

Former franchisees in financial dire straits are looking to the federal franchise inquiry to provide some relief following the recent High Court decision in the Ketchell case which found in favour of the franchisor, according to a column by business commentator Peter Switzer recently. Read more

Franchise inquiry submissions close tomorrow

Submissions to the Federal Government’s current inquiry into franchising close tomorrow (Friday, September 12).  Click here for inquiry details

Allphones battles “dishonesty” ruling

Mobile phone retail chain Allphones will appeal a Federal Court ruling that found the franchisor acted with “calculated dishonesty” in withholding commissions from franchisees, according to a media report. Meanwhile, internal tensions within the system were aired when The Australian published extracts of a letter sent from a group of Western Australian franchisees to Allphones management.  Read more 1;  Read more 2

CBA buys 33% of Aussie Home Loans

Aussie Home Loans has gone from beating the banks to being bought by them after the  Commonwealth Bank agreed to buy 33% of the mortgage broker for a sum rumored to be approximately $60 million. Aussie founder John Symons has indicated that he continues to look for opportunities for the business to grow.  Read more

8 million hotel customers exposed in massive data theft

Up to eight million customers who have stayed in one of 1,300 Best Western Hotels in the last 12 months will be potentially affected after a hacker broke the chain’s IT security and stole personal information including credit card numbers in what has been described as the world’s biggest data heist. Read more

Minister encourages scammed franchisees to sue franchisor

New Zealand Commerce Minister Lianne Dalziel has indicated that franchisees who bought non-existent franchises from rogue Green Acres master franchisee Keith Lapham last year may have a case to sue the franchisor. Green Acres has so far declined to provide compensation to nearly 200 mostly migrant franchisees who were sold non-existent ironing franchises for between NZ$21,000 and $25,000 each. In a recent meeting with franchisees, Ms Dalziel indicated that Latham’s actions, however dishonest, may be seen to incur liability to the company as he was acting as its agent. A group of about 100 franchisees are seeking to raise NZ$140,000 to fund legal action against Green Acres.  Read more  An investigation of the scam by the New Zealand Serious Fraud Office is expected to be completed in less than a month. Read more

See an ACCC franchise investigation in action

Delegates at the National Franchise Convention in Sydney next month will be able to see the workings of an Australian Competition and Consumer Commission (ACCC) investigation of a franchise complaint during a “live” role play case study. The session will outline key investigation steps, and  typical and extreme responses often encountered by ACCC investigators. The case study will be presented by ACCC Queensland Director Alan Ducret and Franchise Advisory Centre Director Jason Gehrke from 9.45-10.30am on Saturday, October 18.  Read more

KFC secret recipe on the move

The original piece of paper containing Colonel Harland Sanders’ original recipe for the 11 secret herbs and spices responsible for the distinctive flavour on which the 15,000 store KFC chain has been built was moved recently under heavy security. One of the most closely-guarded corporate secrets in the world, the KFC recipe is known only to two company executives at any one time, and their details are kept secret too.  Read more

Fashion icon ended Sydney suit franchise

Ermenegildo Zegna, the men’s fashion brand made famous in Australia as the preferred suit brand of dapper former Prime Minister Paul Keating, ended its franchise in Sydney earlier this year in order to open its own stores to directly service its high-end clients.  Read more

NZ travel chain undergoes total rebrand

Long-established New Zealand travel chain Holiday Shoppe rebranded its 64 stores last weekend to Harvey World Travel, in line with the franchised brand owned by its Australian parent company Stella Travel Services. The Holiday Shoppe brand has disappeared after 32 years in New Zealand. The Harvey World Travel brand was used by previous owners of Holiday Shoppe from 1992 but phased out in 2006. Read more  New owners Stella are believed to be also considering a merger and rebranding of its whole operations. Read more

ABC TV show features franchising

In a rare television reference, new ABC series Very Small Business has featured franchising in just its second episode. But don’t be fooled by the title. Very Small Business is not a documentary but a biting satire based around the get-rich-quick character of Don Angel, whose WorldWide Business Group operates multiple dodgy enterprises (all resourced by himself and his hapless journalist employee)  and which range from vending machines selling out of date food to publishing of magazines which print basically enough copies to justify its existence to its unfortunate advertisers. Don has now hit on the idea of selling $100,000 dog washing franchises. Problem is, he’s ready to start selling franchises before the ink has dried from brainstorming the idea on his whiteboard. See Very Small Business, ABC1, Wednesdays at 9pm. Read more

Starbucks starts own daily update for US elections

Despite closing hundreds of stores across the United States, coffee chain Starbucks is determined to show it can still be innovative by offering a free daily newssheet covering the US presidential elections as a “conversation starter” for its customers. Read more

Other franchise news:

- Vodafone to buy major stake in Crazy Johns;

- Recruiting from within: Bakers Delight uses training to elevate staff to franchisees;

- Real estate franchisee jailed for conning elderly vendor;

- Bob Jane marital stoush continues;

- Franchisees seek more money for working capital;

- Multiple-unit franchisee wins WA Business Champions fast food award;

- Mr Rental takes on Sydney market;

- NZ vending machine company to acquire and franchise US partner;

- Foodstuffs set to acquire Liquorland in NZ;

- Kiwi coffee franchise heads to Middle East;

- Sizzler restaurants turn 50;

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