Survey reveals drop in franchising disputes as franchising inquiry continues

A new survey of Australia’s $130 billion franchise sector has shown disputes between franchisees and franchisors have declined, with just 2% of Australia’s franchisees classified as being in dispute.

A new survey of Australia’s $130 billion franchise sector has shown disputes between franchisees and franchisors have declined, with just 2% of Australia’s franchisees classified as being in dispute.

The biannual survey, commissioned by the Franchising Council of Australia and conducted by Griffith University, also highlighted a high level of stability in the sector, with 93% of franchise units staying under the same ownership over the last two years.

The findings come as a federal parliamentary inquiry into the operation of the franchise code of conduct makes its way around the country, amidst growing criticism from former franchisees about intimidation and bullying by franchisors.

The executive director of the FCA, Steve Wright, says it is encouraging to see lower levels of disputes in the sector in light of the parliamentary inquiries into franchising and the breakdown of a number of large franchise systems, including Kleins.

Wright says while the FCA is working with the inquiry on ways to improve the operation of Australia’s franchise sector, the industry is in good shape.

“What the Griffith survey results tell us is that there is no need for wholesale changes to the legislative or regulatory settings.”

The survey revealed strong growth in the sector since 2006, with the number of franchise systems growing 14.6% and the number of franchise units increasing by 15.4%, compared with an increase of 14.6% between 2004 and 2006.

The total number of people employed in franchise systems is estimated to be 413, 500, with annual turnover is estimated to be $130 billion.

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