Fair Trading (Franchising Industry Dispute Resolution Code) Regulations 2015

The Code will promote the successful resolution of franchising related disputes in a streamlined and defined manner and covers participants in the franchising industry including:

  • a franchisor
  • a franchisee
  • an associate of a franchisor
  • a person carrying on a business having a connection to a franchisor for a purpose relating to a franchise agreement
  • a person carrying on a business having a connection to a franchisee
  • a person who in the course of a business supplies goods or services to a franchisee or to a franchisor in connection with a franchise agreement.

The Code sets out a series of steps or actions that can be taken by the Office of the South Australian Small Business Commissioner (SASBC) to help bring parties in dispute together, with the intention of assisting them and resolving the dispute in a timely and mutually beneficial manner.

Disputes can include:

  • payment disputes
  • re-negotiation of contracts
  • work completed incorrectly
  • non-payment of account
  • good supplied not to the standard or quality ordered

The Code also deals with business related disputes between participants in the franchising industry and local and state government.

The code helps participants in the industry by providing mandatory alternative dispute resolution process on a no or low cost basis overseen by the Small Business Commissioner.

Breaches of the code can attract:

  • a civil expiation fee of $4,000 for a corporation and $500 for a natural person
  • SASBC may take court action to obtain a civil penalty of up to $50,000 for a corporation or $10,000 for a natural person.

Relationship with National Franchising Code of Conduct

The SASBC will work with franchise participants to resolve any dispute informally. Should that be unsuccessful, participants will be encouraged to use internal complaint resolution processes in the franchise agreement or the mediation process set out in the Federal Franchising Code of Conduct. If there is still no resolution, the Franchising Industry Dispute Resolution Code can be activated by the Small Business Commissioner where the alternative dispute resolution process will be mandatory and will be backed by financial penalties to focus the efforts of the parties during negotiations.

To view the Fair Trading (Franchising Industry Dispute Resolution Code) Regulations 2015 click here.