Cleaning up the franchise sector

BSCAA national president George Stamas weighs in on the recent parliamentary inquiry into franchising.

The recent parliamentary inquiry into franchising in Australia proposes some substantial changes to how franchising businesses are run in Australia, particularly the relationship between franchisors and franchisees, and how this is reflected in the Franchising Code of Conduct. So what are these changes and what do they mean, if anything, for franchise businesses within the Australian cleaning industry?

Cleaning up the franchise sector

Apologies for the pun, but you’re probably aware of the controversies and disputes surrounding the franchising sector in recent years. It’s been well covered in the media for some time. For many industries there are real and pressing concerns about the conduct and fairness of franchisors and their relationships with franchisees.

But you might ask, is this true for franchise businesses in the Australian cleaning industry. Happily, our industry has been free of issues in its franchise sector, and it continues to function fairly and well.

The beauty of this recent government inquiry and its recommendations, from our perspective at the BSCAA, is that is clarifies and ensures the law better reflects what people are entitled to expect from a well-run franchise business model.

Although we at the BSCAA have played no direct part in the inquiry, we certainly applaud any changes that help franchise businesses work more effectively and fairly. It’s good news for BSCAA members, and it’s good news for the cleaning industry in general.

The inquiry’s findings in a nutshell

Keep in mind that this inquiry covered franchising systems across all industries. Disturbingly, what the parliamentary committee found was that there is systematic exploitation of some franchisees by a subset of franchisors, and the current regulatory framework isn’t adequately protecting them.

In response, the parliamentary committee is proposing substantial changes to the Franchising Code of Conduct and to the responsibilities and powers of the ACCC. This includes a raft of changes designed to lift the standards of franchise operators and rebuild confidence in franchising in Australia.

It’s important to remember here that this is only a minority of franchise operators, and no mention is made of those in the cleaning industry.

Who’s affected?

Among the BSCAA membership, we have a number of members operate as both franchisors and franchisees. Although the franchising model has been a part of the cleaning industry for decades, it’s never represented a large proportion of either the industry in general nor the BSCAA membership.

Franchised cleaning businesses are important, but they are still only a minority across the cleaning industry. Even if franchising isn’t a major part of the cleaning industry, it’s still important that we don’t overlook those businesses involved in it.

What does it mean for our industry?

These changes to how the franchise model operates, together with other recent recommendations and advancements, such as subcontractor reporting and single-touch payroll, are another step towards building an even stronger, fairer and sustainable cleaning industry.

In effect, these changes will amount to another weapon in our industry’s armory against illegitimate and unscrupulous operators. And from the BSCAA perspective, that can only be a good thing.

What should we expect now?

As mentioned, the limited number of franchise businesses in the industry and among the BSCAA membership, and the quality of businesses in general, means that there should be little or no cleaning businesses that experience any major effects from the findings and recommendations of this inquiry.

With all that said, if this does raise any concerns, confusion or uncertainty, remember that your local BSCAA representative or branch is there to help with equitable and impartial advice and representation when you need it.

All in all, at the BSCAA, we welcome these reforms to the franchising business sector. We see it as a reward for the majority of cleaning and related businesses in Australia that have worked hard to run their businesses legitimately and with integrity. It’s those businesses that will reap the rewards. And that’s what we’re all about.

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