WA franchisee advocate explains why state laws are necessary

Western Australia’s shadow minister for commerce and small business, Ljiljanna Ravlich, has explained why she is trying to push through state-based franchising laws that include penalties for breaches of the Franchising Code of Conduct and provide a statutory duty of “good faith” for negotiating contracts.

Ravlich has reintroduced a franchising bill into the state parliament, which is only slightly different to the recently rejected private member’s bill from Liberal MP Peter Abetz.

She told SmartCompany this morning that “if the federal laws were beefed up to the extent that franchises were given greater protections, there possibly may not be a need [for state laws].”

“But currently as they stand there is a need and until that is changed, we will be pursuing the path we are on.”

The Federal Government has argued that its franchising laws are the subject of years of negotiation and deserve more time before being amended.

The competition regulator has also expressed a preference for federal governance.

Nonetheless, WA and South Australia both took action last year to introduce state-specific laws in 2011, with the WA vote losing by just one vote, but SA succeeding with its small business commissioner legislation.

Questioned on his motivation for introducing the bill, Ravlich says franchisees get a “raw deal” in terms of expectations, conditions and bargaining.

“There are benefits with buying a franchises business, marketing and so on.”

“It’s unfortunate that so many franchisee get so burnt by the arrangement.”

And she hit back at criticisms that there is no need for good faith provisions. “The argument that people don’t understand what it is, that’s nonsense.”

The Labor MP Ravlich says she’s not yet had discussions with other parties regarding the franchising bill. “There’s a long way to go,” she says.