INTHEBLACK June/July 2024 - Magazine - Page 41
The latest review of Australia’s
Franchising Code of Conduct
recommends several changes,
including additional protections
for franchisees.
Misunderstanding of
goodwill continues to
be a common cause
for disputes at the end
of franchisee agreements.
Accountants have a key role
to play in helping clients
navigate the franchising
system and fulfil their duties
as business owners.
Franchises
future-proofed
The latest review of the Franchising Code of Conduct recommends
greater protections for franchisees in Australia. Accountants will play
a vital role in guiding clients through the proposed changes.
Words Beth Wallace
The franchising industry is a major
player in the Australian economy. It collectively
employs more than half a million people and
turned over about $135.2 billion in 2023,
according to the Treasury’s Review of the
Franchising Code of Conduct Final Report,
released in February 2024.
Yet interest in the sector has waned.
According to the report, the total number
of franchisees declined by about 5.2 per cent
between 2014 and 2023. This is in stark
contrast to the broader Australian business
population, the report notes, which grew
by 28 per cent during the same period.
In addition to the economic hardships
that all businesses face in the current market,
the franchise sector must navigate a unique
set of challenges, which may play a part in
its recent downturn, says Peter Knight FCPA,
business and franchise accountant at
Franchise Accounting and Tax in Sydney.
“The costs to set up a new franchise have
increased dramatically over the last couple
of years, but we are seeing that many
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