Australia's troubled franchise industry to be put under the microscope
Written on the 12 March 2018 by Ben Hall
After a string of scandals involving franchisee exploitation and underpayments to workers, Australia's $170 billion franchise sector looks certain to be the target of a Senate inquiry.
New South Wales Nationals Senator John Williams has reportedly confirmed he intends to move a referral to hold a parliamentary inquiry into the franchise sector within the next week and that he says he has the numbers to move ahead with proceedings.The inquiry will focus on self-regulation within the franchise industry in the wake of allegations of an "exploitative and unsustainable" franchise model operated by listed company Retail Food Group (ASX: RFG).
Retail Food Group is facing the potential for two separate class actions following a damning report from Fairfax Media which alleged it operated a business model that had sent hundreds of franchisees within its network to the wall financially and that there was widespread underpayment of staff by store owners.
Sherlock says there also needs to be reforms to the FCA's membership structures.
Business News Australia
Author: Ben Hall