The Franchise Council of Australia appears to have won the battle to stop a Western Australian private member’s bill that would have introduced a new set of franchising regulations to the state.
West Australian Premier Colin Barnett said yesterday that the bill, proposed by fellow Liberal Peter Abetz, would not be put to a vote in the West Australian lower house and would instead be set before the Parliamentary committee for further scrutiny.
“Peter is quite genuine in what he is bringing forward but there are a lot of differing views in the franchising world about this,” Barnett told reporters.
“It’s a difficult issue in the sense that it would put Parliament and law in between commercial relationships, between business players. I think a committee of the Parliament would be the best way of proceeding.”
It now appears likely that there will be a sort of mini-inquiry into the proposed bill, meaning it is highly unlikely the Bill will become law any time soon.
Federal Small Business Minister Nick Sherry, who opposes the introduction of state-based franchising legislation in WA and similar legislation in South Australia and supports the national Franchising Code, was quick to seize on Barnett’s comments and declare the proposal dead in the water.
“The decision provides greater certainty for franchise businesses in WA and national franchise systems that operate in WA,” Sherry said in a statement.
“I hope similar moves in South Australia will be reconsidered in light of WA’s decision.”
But Franchise Council executive director Steve Wright isn’t quite sure the legislation is dead.
“I am not willing, on behalf of the WA franchising community, to call it off the agenda. It’s not that certain just yet, but it’s headed in the right direction,” he told SmartCompany today.
“It doesn’t appear to be the same near and present danger it was two weeks ago, and I think you can put down that squarely to the impact of the strong response from the WA franchising community.”
The Franchise Council has been engaged in an increasingly dramatic fight over the Bill, and with its author, University of New South Wales associate professor, Frank Zumbo.
On Monday, the Fracnhise Council questioned Zumbo’s ethics, questioning whether the professor was representing himself, his university or another party. Zumbo defended himself, saying he does represent himself in all his advocacy roles.
News of the WA Bill’s apparent demise has left one franchisee advocate deeply unimpressed – Jack Cowin, rich list member, owner of the Hungry Jack’s franchise brand and the owner of a number of KFC franchises in Western Australia.
Cowin, who is in a battle with KFC franchisor Yum! Brands over Yum’s decision not to renew several franchises, has fired off a strongly-worded letter to Colin Barnett saying his company Competitive Foods is one of many franchisees suffering from a process called “churning”, whereby supposedly “rogue” franchisors threaten to terminate a franchise, offer to buy it back on the cheap and then sell it again.
“The truth is that what Yum attempted to do to our company is what is occurring in franchising around Australia on an all too frequent basis,” Cowin’s letter said.
In a separate media statement he accused the Franchise Council of spreading “misinformation” about the WA Bill.
“This campaign directed at members of the Liberal Party and the threats against Mr Abtez personally by members of the FCA has been nothing short of shameful.”
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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