Overhauling Australia’s Overburdened Franchise Landscape
The franchise industry in Australia is at a critical crossroads.
For years, the sector has been weighed down by an ever-growing web of heavy-handed regulations that have stifled growth, discouraged entrepreneurship, and created unnecessary barriers for both franchisors and franchisees.
But now, the Franchise Council of Australia (FCA) is spearheading a bold plan to shift the balance of power back to the industry itself.
Led by CEO Jayson Westbury, the FCA is on a mission to reduce regulatory burdens, empower franchisors and franchisees, and establish a more user-friendly, nimble system that serves the needs of the entire franchise ecosystem.
In a candid conversation with Joel Kleber from Jim’s Group, Westbury outlined the FCA’s ambitious vision for reform – one that could have far-reaching implications for the future of franchising in Australia.
The Burden of Over-Regulation
At the heart of the FCA’s reform agenda is the recognition that Australia’s franchise sector is the most heavily regulated in the world.
Over the past 30 years, the Franchising Code of Conduct – the governing document that oversees franchisor-franchisee relationships – has become an ever-growing, overburdened piece of legislation.
As Jay explains, “It’s common knowledge that we are the most regulated franchising industry in the world. Typically of Australia, we like to overregulate things. What’s happened over the 30 years of the development of the franchising code is that it’s morphed into now a heavy-weighted, heavy-handed, overburdened document.“
This regulatory burden has created significant challenges, particularly for small business owners looking to enter the franchise space.
As Jay notes, “When you’re starting out, you’ve got maybe a hundred grand or 150 grand to invest in a franchise, and you’re handed this booklet of legal documentation and it says, ‘Go and get legal advice and go and do this and go and do that.’ It’s ching-ching-ching. So it’s become a real barrier to entry.“
The heavy-handed nature of the code has also had a stifling effect on entrepreneurship and innovation.
As Jay explains, “Australia is really well known as a sort of melting pot of concepts and ideas, and so many have become successful franchises through the years. But this heavy-handed regulation that we now sit in, I think, is stifling some people’s thought processes about taking their idea into franchising, which is not good for the sector.“
Shifting Power Back to the Industry
To address these challenges, the FCA is proposing a fundamental shift in the way franchising is regulated in Australia.
Rather than relying on government bureaucrats to dictate the rules, the FCA wants to empower the industry itself to set the standards and manage the system.
Jay’s vision is to establish a new organization called the Franchising Accreditation and Mediation Organization (FAMO).
This industry-led body would be responsible for accrediting franchisors and franchisees, setting guidelines and standards, and providing a free, peer-to-peer mediation service to resolve disputes before they escalate to the courts.
- Accreditation: FAMO would accredit franchisors and franchisees who meet its industry-developed standards and guidelines.
- Standards and Guidelines: The industry itself would come together to determine the rules, regulations, and best practices that FAMO would enforce.
- Mediation: FAMO would offer a free mediation service, allowing franchisors and franchisees to resolve issues through peer-to-peer negotiation rather than costly legal battles.
The goal, Jay explains, is to “take what was a really good idea in travel and nuance it for franchising.”
In the travel industry, Jay and his team were able to successfully lobby for the deregulation of the sector, shifting power away from government and into the hands of the industry’s own accreditation body.
Jay believes a similar approach can work for franchising in Australia.
“You can’t do that with government,” he says.
“You can only really successfully do that when it’s the industry talking amongst itself and the industry trying to solve the problems themselves.“
Garnering Grassroots Support
Achieving this industry-led reform won’t be easy, however.
Jay acknowledges that navigating the political landscape and securing buy-in from government will be a significant challenge.
But he’s confident that the FCA can rally the broader franchise community to drive change.
A key part of the FCA’s strategy is to build a groundswell of grassroots support from franchisors and franchisees across the country.
Jay emphasizes the importance of getting “everybody on side with what’s being thought about” – from individual franchisees to large, multi-unit operators.
To that end, the FCA is rolling out a number of initiatives to engage the franchise community and elevate the industry’s profile, including:
- The Franchise Industry Awards – a new awards program that celebrates excellence across the sector, open to both FCA members and non-members.
- The National Franchise Convention – an annual event that brings the industry together for learning, networking, and professional development.
- The Certified Franchise Executive (CFE) program – a credentialing initiative that recognizes franchising expertise and commitment.
By fostering this sense of community and shared purpose, Jay hopes to create a powerful, unified voice that can effectively lobby the government for the changes the industry needs.
Bridging the Divide Between Franchisors and Franchisees
Another key focus for the FCA is strengthening the relationship between franchisors and franchisees.
Jay recognizes that the success of the franchise model depends on a symbiotic, mutually beneficial partnership between these two groups.
To that end, the FCA is working to improve communication and engagement across the franchise ecosystem.
Jay acknowledges that in the past, the FCA’s outreach has been primarily focused on franchisors, with less direct connection to individual franchisees.
Moving forward, the FCA plans to change that, making a concerted effort to connect with franchisees and give them a stronger voice in the industry’s affairs.
As Jay explains, “If we had more direct connection with the franchisors, where we’ll be able to communicate with them on things that we’ve got on things that we’re doing… they’ve got their own opinion. I mean, you know, Jim’s got his opinion and we respect it, but they’re running their own businesses as well. They’re going to have an opinion.”
By fostering this two-way dialogue, the FCA hopes to better understand the needs and concerns of franchisees and ensure that any reforms or initiatives truly serve the interests of the entire franchise community.
A Brighter Future for Australian Franchising
As the FCA starts on its ambitious reform agenda, the future of franchising in Australia hangs in the balance.
But Jay and his team are unfazed, driven by a conviction that the industry can – and must – take the lead in shaping its own destiny.
Through initiatives like FAMO, the Franchise Industry Awards, and the National Franchise Convention, the FCA is working to build a more collaborative, transparent, and responsive franchise ecosystem.
By rallying the grassroots support of franchisors, franchisees, and the broader business community, they hope to create the groundswell necessary to drive meaningful change.
It won’t be an easy road, but Jay is confident that the franchise industry has the power and the passion to overcome the challenges it faces.
As he puts it, “We love a challenge, and I think there is some clear air on a way forward.”
For franchisors, franchisees, and aspiring entrepreneurs alike, the FCA’s vision for reform offers a tantalizing glimpse of a brighter future for Australian franchising.
By empowering the industry to shape its own destiny, the FCA is paving the way for a more dynamic, innovative, and prosperous franchise landscape – one that can truly unlock the full potential of this vital economic engine.
Get Involved with the FCA
If you’re a franchisor, franchisee, or simply franchise-curious, the FCA encourages you to get involved and lend your voice to the industry’s reform efforts. Here are a few ways to connect:
- Visit the FCA website to learn more about the organization, its initiatives, and how to get in touch.
- Attend the National Franchise Convention in October, where you can network, learn, and engage with the broader franchise community.
- Explore the Certified Franchise Executive (CFE) program to develop your franchising expertise and credentials.
- Connect with the FCA to stay up-to-date on the latest news and developments.
By working together, the franchise industry can overcome the challenges it faces and build a brighter, more prosperous future for all.
The FCA is leading the charge, and they’re inviting you to join them on this transformative journey.