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The enforcement of the franchising code of conduct and sector is set to be further strengthened by the government in a bid to extend SME protection.
Franchising sector ‘playing field’ to be bolstered by Albanese government
20 March 2025
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7 minute read
The government has announced stronger enforcement of the franchising code of conduct and extended protections from unfair contract terms and trading practices to all businesses under the code.
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Creating a fair playing field in the franchising sector was a key goal for the government as it employed up to 520,000 people and contributed more than $135 billion to the economy each year.
The government revealed it would provide $7.1 million over two years from 2025–26 to strengthen the Australian Competition and Consumer Commission’s (ACCC) enforcement of the franchising code of conduct.
This investment would help ensure appropriate enforcement of the remade franchising code and was set to come into effect on 1 April 2025.
Julie Collins, Minister for Small Business, said the funding would increase its enforcement actions against those who didn’t act responsibly and would enhance the ACCC’s engagement and education activities.
“The Albanese Labor Government is committed to building the long-term resilience of the franchising sector by introducing considered reforms that address identified harms,” she said.
“More active enforcement and compliance work by the ACCC will help target bad behaviours without increasing the regulatory burden for those in the sector already doing the right thing.”
Additionally, the government said it would extend protections for businesses regulated by the franchising code from unfair contract terms and trading practices.
This move would help franchisees vulnerable to unfair trading practices, as franchisors controlled key aspects of a franchisee’s business, such as branding, marketing, supply chains and operational processes.
Minister Collins said unfair contract terms and unfair trading practice reforms would help address the power imbalance that franchisees could face and would improve the fairness of relationships between franchisees and franchisors.
“This will improve the viability of franchising, attracting a broader pool of business talent and encouraging more investment in the sector,” she said.
“The extension of these protections will progress alongside other work focused on addressing business power imbalances, including the statutory review of the 2022 amendments to the unfair contract terms regime, due to commence later in 2025, and consultation on extending unfair trading practices protections to small businesses.”
It was noted automotive dealerships would be included in the reforms and the government would prioritise work to count emissions under the new vehicle efficiency standard at the point of sale rather than a vehicle imported to Australia.
“These measures support one of the government’s key small business priorities to level the playing field for small businesses by enabling healthy competition and ensuring small businesses get a fair go,” Minister Collins said.
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