The Franchising Code of Conduct is a mandatory code, administered by the Australian Competition & Consumer Commission (ACCC), which regulates the conduct of participants in the franchising industry in Australia. The Code can be downloaded here.
The franchise agreement defines the relationship between the franchisor (grantor or the right to carry on a business subject to the agreement) and the franchisee (the receiver of that right in exchange for payment of various fees) and obliges both parties to act in good faith with each other in in respect to any matter arising under the agreement and the franchising code. The ACCC investigates alleged breaches of the Code and can take appropriate enforcement action. See Franchising Investigations for recent enforcement actions.
The role of the ACCC does not extend to disputes that involve only contractual issues. The franchisor is required by the Code to develop an internal complaint-handling procedure and for contractual disputes to be negotiated in good faith. However, where the dispute cannot be resolved within 3 weeks the Code provides that mediation must take place with either the franchisor or franchisee referring the matter to a mediator. If the parties can’t agree on a mediator for the dispute either of them may ask the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) to appoint a mediator. They will help the disputing parties choose a mediator from the those that have been accepted and approved by the ASBFEO as someone appropriate for the dispute in question.
This had previously been posted on www.jadr.com.au. The post can be found on the following here.