Inquiry update: Hearing controversy, more submissions online
Public hearings for the Federal Government’s current inquiry into franchising have sparked controversy, with scheduling conflicts causing the Melbourne hearing date to be changed and the Perth date to be cancelled altogether.

The Melbourne hearing, originally scheduled for October 24, was changed to November 5. Scheduled to present at this hearing were a variety of groups including the Australian Retailer’s Association, a delegation from the Franchise Council of Australia, the Hertz Franchisees’ Group, the Post Office Agents Association, a member of the South Australian Parliamentary Committee which conducted the SA franchise inquiry earlier this year, a former franchisee, and a franchise consultant. A delegation from the Australian Competition and Consumer Commission (ACCC) including Commission chairman Graeme Samuel, deputy chairman Michael Schaper, CEO Brian Cassidy and compliance strategies general manager Nigel Ridgeway also attended. (Transcripts of this hearing were not available at the time of publishing, but may be found online at the inquiry website in the near future).

The cancellation of the Perth hearing date has caused some disappointment in Western Australia, where a state-based franchising inquiry was also conducted earlier this year.  Read more

The number of submissions to the inquiry has also increased from 140 to 158, with all submissions  now available to view online (less two submissions which have been withdrawn). Where confidential submissions have been provided to the inquiry, short summaries of non-identifying key issues have been uploaded to the website.

The Inquiry report is due to be provided to Parliament on December 1.  Read more 

ACCC action results in jail for franchise conman
A former franchisor, described as one of “Australia’s most notorious conmen” has received a 10-month jail sentence for contempt after breaching court orders in an action brought by the ACCC. Bon Levi, whose aliases include Ronald Frederick, Roddy Farrow, Ronald White and others, was previously prosecuted by the ACCC for breaches of the Franchising Code of Conduct and misleading conduct in 2005 for his role in selling Little Joe Snax franchises. Orders from this prosecution required Levi to provide written disclosure about his history, past aliases, and previous breaches of the Trade Practices Act before accepting payment for any business opportunity or franchise.The ACCC monitored his activities and received complaints about businesses Levi was trying to sell, including Little Joe Snax, LPG conversions, and Bikini Girls Massage businesses. According to the ACCC, Levi has a long history of defrauding Australians by setting-up bogus franchises and businesses that he sells on the promise of guaranteed future earnings.Levi pleaded guilty to five counts of contempt of court and was jailed for 10 months, with six months suspended.  Read more

In related news, the ACCC has issued its latest quarterly activity report, covering the period July 1 to September 30. Click here for details 

US franchisors passing more costs to franchisees
As the domestic economy slows in the United States, franchisors are passing on more costs to franchisees such as store design, equipment maintenance, fuel surcharges and training, according to a news report. Such costs have previously been met by the franchisor, wholly or in part, but are now being passed on to franchisees who are already conscious of costs as sales come under pressure in a tightening market.  Read more 

Franchising in tough times
In an economic environment where the news seems to go from bad to worse, franchising is well-positioned to weather the storm providing that franchisors and franchisees understand how the economy will impact their respective businesses.Franchisors need to review key elements of their business model to ensure these are able to withstand the onslaught of economic volatility. Changes to these elements may include:  Read more 

McDonald’s introduces international packaging change
McDonald’s has launched new packaging which includes nutritional information about its products and photos of their ingredients. Over the next two years, the packaging change will affect all 118 countries in which McDonald’s operates and is being described as the most comprehensive rollout in the company’s history. The first countries to change to the new packaging are the United States, the United Kingdom and Ireland.  Read more 1  Read more 2 

Chaos control improves leadership skills
Economic turmoil can provide an opportunity for organizations and their managers to demonstrate outstanding leadership, according to a US-based researcher.  Read more 

WA trading hours under attack
The Shopping Centre Council of Australia (SCCA) has sought legal advice to mount a court challenge against Western Australia’s restrictive Sunday trading laws. The SCCA says the laws are “discriminatory” and costing the local economy millions in lost trade.  Read more 1   Read more 2 

Forum for government to listen to small business
The Federal Government will host a Small Business Forum in Melbourne on November 21 for business owners and managers to hear about and provide feedback on issues affecting small business. The Forum will be hosted by Small Business Minister, Dr Craig Emerson, and follows a recent Small Business Summit in Brisbane on October 24 hosted by the Minister and also attended by Prime Minister Kevin Rudd and Treasurer Wayne Swan. The Brisbane Summit was attended by more than 500 people, including a representative from the Franchise Advisory Centre. For details on the Melbourne Forum on November 21, click here.  

Possible relief for Bill Express newsagents
Newsagents still making lease payments for equipment provided by the now-defunct Bill Express network may be relieved of this obligation if a court action by the ACCC is successful. The ACCC allege that Bill Express and Technology Business International (TBI), the supplier of the equipment, engaged in misleading conduct by requiring newsagents to enter into two contracts for the equipment. Under these contracts, TBI charged a lease of $495 per month, and Bill Express would then rebate the same amount to cover the lease. Up to 4,500 merchants are affected by this arrangement, which the ACCC alleges is third line forcing. Approximately 900 newsagents are still paying the monthly lease fee for equipment that is no longer able to be used. Read more 1  Read more 2 

Other franchise news:
- ABC Learning Centres placed in receivership;
- Bendigo Bank cancels $75 million capital raising;
- Flight Centre forecasts earnings downgrade;
- Diamond franchise grows its own stones;
- Subway Aust-NZ manager’s formula for success;
- October sales drop 0.6% for Harvey Norman;
- Gerry Harvey frank about future performance;
- Dominos plans to add another 50 stores in 2009;
- Site selection experts commence franchising;
- Facelift for NightOwl convenience retailer;
- Coupons help consumers balance household budgets;
- Franchisors bracing themselves for slowdown;
- Fuel costs prompt pizza franchise to increase driver pay by 20%;
- Franchises benefit as economy falters; 

Franchise Appointments & Departures: 
The Franchise Association of New Zealand (FANZ) has appointed Graham Billings to the role of general manager. 
Gloria Jean’s Coffees has appointed its chief financial officer, Keith Brown, to the position of International CEO, effective from January 1, 2009. He will be succeeded as chief financial officer by current group financial controller Annake Dippenaar.Gloria Jean’s has also promoted operations head Neil Gill and franchise development head Gareth Pike to the roles of general managers.  
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