The Australian government release of the Competition and Consumer (Industry Codes-Franchising) Amendments (Fairness in Franchising) Regulation 2021 made amendments to the Franchising Code of Conduct (Code). The main changes include reforms to dispute resolution from 2 June 2021, disclosure document from 1 November 2021 and termination reforms from 1 July 2021.
The changes will impact new franchise agreements as well as renewed or any extension of an existing franchise agreement.
Alternative Dispute Resolution Amendments
Alternative Dispute Resolution (ADR) options have been expanded in the Code to include provision for conciliation and arbitration while maintaining mediation as an option to determine disputes.
The resolution method to be adopted is at the election of the parties. If multiple franchisees have similar disputes under their franchise agreement against a franchisor, they can seek to have their dispute resolved together and have the matter dealt with in the one resolution process.
There is now also a voluntary arbitration option.