If the recent terrorist attack in Christchurch has taught us anything in New Zealand, it’s not to be complacent. We may be the most isolated nation in the world but we’re not immune to the problems that the rest of the world faces.
That’s why the Franchise Association of New Zealand’s response to the latest Australian Inquiry into Franchising, whose report is entitled Fairness in Franchising, is a bit surprising. Especially since some of the franchises condemned by the Inquiry’s Fairness in Franchising report also operate in New Zealand.
“…the Australian report is focused on Australian franchising, where there is a different legislative and business environment,” said FANZ’s chairman in a statement.
Yes, franchising in Australia is highly regulated – unlike franchising in New Zealand – but that regulation has done little to prevent what the Australian senate committee called “systemic abuse”.
“The current regulatory environment has manifestly failed to deter systemic poor conduct and exploitative behaviour and has entrenched the power imbalance,” the committee said.
Could what’s happened in Australia happen here? It could, and it is. As someone who makes his living in franchising, I’ve seen it. And I believe it represents an enormous risk to our industry.
Should we learn from other countries’ mistakes to ensure a fairer, more effective franchise environment? Would a more protective environment actually help to ensure the franchising industry’s health and continued growth?
Most industries involving the investment of large amounts of other people’s money are regulated for the protection of the investors – and ultimately the long-term protection and health of the industries themselves. Why isn’t franchising?
I have some ideas on franchise regulation which I’d like to share with you in a future post. I would also be happy to share your views and ideas - just send me an email on robin@noordinary.co.nz.
I'm Robin La Pere, no ordinary business expansion and franchise consultant. I've been involved in franchising for more than 20 years, and I am one of the few franchise consultants I know who have a combination of franchise management, franchise ownership and franchise consulting experience. I understand the industry at every level and across a wide range of business types. I have worked with many franchise systems to improve, develop and innovate.
As someone who believes that the franchising business model is an excellent way to scale while giving people a leg-up into their own businesses, I am appalled by the allegations of yet another Australian Franchising Inquiry of widespread misconduct in the industry.
The Inquiry's report raises two questions in my mind: Can you regulate against misconduct by a few in franchising to protect the many who are conducting themselves in an appropriate manner? And if so, are we being irresponsible in New Zealand by pretending that what happened in Australia couldn't happen here and failing to introduce appropriate protections?
