Legal Issues in Franchising in Australia: Is the Current Regulatory Environment for the Franchise Sector Adequate?
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Franchising is one of the fastest-growing business sectors in Australia, contributing about 12 percent to the country's economy.2Australia is a heavily franchised nation, with nearly three times as many franchise systems per head of population as the United States.3 The franchising relationship is commonly referred to as a 'commercial marriage', in which the parties depend on each other for their continued well being, the relationship is intended to continue for a lengthy period of time and is intended to be satisfactory to both parties.4 Nevertheless, this 'marriage' between franchisor and franchisee is inherently fragile and has recently become more complicated. There has been a great deal of discussion about the nature of the franchise relationship and how it should be regarded in law,5 given that the area of franchising governed by contracts has always been problematic. In Australia's complex economy, the legal system faces the challenging task of developing and enforcing the legal rules of franchising to the benefit of both parties. This article examines the effectiveness of the regulatory changes made to the Franchising Code of Conduct (FCC) on 1 July 2010 and the likely impact of these changes on both franchisors and franchisees.
Macquarie Journal of Business Law
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Commercial and Contract Law