Retailers have welcomed the release of the new Franchising Code of Conduct, to be implemented from January 1, 2015.

Changes to the Franchising Code of Conduct include the introduction of a ‘good faith’ obligation on both franchisees and franchisors, as well as more flexible and stronger enforcement options for the Australian Competition and Consumer Commission (ACCC), with the introduction of civil penalties for serious breaches of the new Code.

Small Business Minister, Bruce Billson, says the revised Code will eliminate $8.6 million in administrative costs a year, with the savings to “encourage innovation and investment” across the sector.

“The amendments get the balance right between maintaining a level of regulation to foster the effective operation of the sector while reducing the overall regulatory burden,” Billson said.

Australian National Retailers’ Association (ANRA) CEO, Anna McPhee, said the new Franchising Code will reduce business costs, improve confidence in the franchising system, and provide greater transparency and clarity around the roles and responsibilities of franchisors and franchisees.

Franchise Council of Australia GM, Kym De Britt, said the review was of great interest to members, and franchisors and other stakeholders across the country had participated in the various stages of consultation.

“The Franchising Code of Conduct review and subsequent update has been a lengthy process. During that time, both Governments have sought input from across the sector. It is pleasing to see that much of the contribution made by our members has been taken into account and is reflected in the update,” De Britt said.

“Our members work at the coalface of what is a major part of the Australian economy. Both franchisors and franchisees are best placed to provide input into regulation that will ensure the Australian franchise sector remains a healthy and ethical place to do business.”