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Buying A Franchise In Australia? Beware Of Those "Verbal" Promises

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In Australia, the franchising sector is one area where numerous complaints are
received by the national franchising regulator, the Australian
Competition and Consumer Commission
(ACCC). During the last financial
year the ACCC received more than 500 franchising complaints, and more
than a quarter of these were related to contractual disputes.

According to, here's how franchise disputes are generally handled down under;

The Franchising Code of Conduct provides a choice of procedures for
formally resolving disputes about franchise agreements. Firstly,
franchise agreements must set out an internal complaint-handling
procedure for the franchise system.

Secondly, there is a code
complaint-handling procedure. These are designed to assist franchisees
and franchisors to avoid potentially costly and time-consuming legal
action. You can choose to use either or both of these procedures.


So, in Australia, basically, it goes to a mediator. Does that sound familiar?

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That's something I personally can't stand. It gives way too much power to the franchisors.

In the US, if franchisors choose the mediation route for franchisee disputes, (it will say as much in the FDD) they will be done in the state that the franchisor's headquarters are located in.

Advantage: Franchisor

I'm really not slamming franchisors. I just know what happened to a friend of mine, when he had a dispute "mediated." He told me that he never felt he had a chance once he showed up at the franchisors's headquarters.

Can we just go back to the old days? Courts. Judges. Etc.

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joel libava

I'm The Franchise King®, Joel Libava. I help prospective franchise owners avoid bank account emptying mistakes.
For 23 years, I’ve been showing people how to make smart, informed decisions on franchises to buy, and I can help you, too!
P.S. I'm not a franchise consultant/broker.

Straightforward Advice
Joel, thank you for taking the time to speak with me yesterday. It was refreshing to finally speak with someone in franchising who dishes out straightforward, candid advice. You provided me with some insightful ideas that I'm giving a good deal of thought and consideration to. I look forward to speaking with you on our next consultation call."
- John Timmins, Columbia, South Carolina
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