A South Australian franchisor has said he will no longer open any new stores within his home state after the Government created a new small business commissioner role which would have the power to change industry codes of conduct.
The threat, from GameTraders chief executive Mark Langford, also comes after University of New South Wales professor Frank Zumbo was announced as the state’s deputy commissioner. The franchising industry has been in an uproar, claiming Zumbo is biased and too far removed from the state to be an effective commissioner.
Langford, who is a state president of the Franchise Council, agrees, saying that he will not open any more stores within South Australia as a protest.
“We don’t do the wrong thing. We work with our franchisees, but there are fines hanging over us of $25,000 if we breach the national code. Why do we need extra laws that keep franchisors out of the state?”
Langford says he has spoken with two other national franchises which have said they may stay away from South Australia as a result of the legislation.
“Adelaide isn’t at the top of the priority list. They see it as a threat to their business. Two people have already said to me they were thinking about turning their businesses into franchises, but this was enough to put them off.”
“They’re making it sound like all franchisors are bad, and they say that if you’ve done nothing wrong you’ve got nothing to be worried about. But that’s missing the point.”
Langford says he isn’t opening any new stores in SA not because he is afraid of the laws, but as part of a protest.
“I’ve put this out there, and I’m sticking by it, not because I’m afraid of being fined, but because I believe we do everything in our ability within our agreement in the code of conduct.”
“I’m doing this as a protest because I’m just sick and tired of governments thinking they can legislate to save everybody.”
Langford says he wants to be legislated by the national code only, and also criticised Zumbo’s appointment.
“How can he be impartial? He’s never consulted with any franchisor that I know of, and he obviously thinks franchisors are a bunch of people who can’t be trusted.”
“This is where the trouble lies in this whole issue. I’m talking as a business owner in South Australia, and I’m just sick and tired of red tape.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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