By Aimee Chanthadavong

The Federal Government plans on improving Australia's franchising sector in response to the 2013 Independent Review of the Franchising Code of Conduct.

Releasing the government's response, the Minister for Small Business Gary Gray said the Code would deliver better outcomes and provide certainty for franchisors and franchisees.

"The government will move to introduce into the code an obligation to act in good faith, and to include civil pecuniary penalties for breaches of the code," he said.

"The government will also address other areas of concern, including marketing funds and disclosure and will seek to provide certainty by accepting in principle that once implemented, another review of the sector will not occur for five more years."

The government appointed Alan Wein to review the Code in January to make recommendations to ensure the franchising sector was operating in the best interests of its participants as a whole.

It was important to clarify the obligations franchisors and franchisees had under the Franchising Code of Conduct and to ensure the courts and the Australian Competition and Consumer Commission had the appropriate powers to deal with rogue operators who abused their power in a franchising relationship.

Franchise Council of Australia general manager Kym De Britt said on a whole the federal government was very supportive of the whole process.

“It was extremely consultative process and it included a lot of stakeholders,” he said.

“One of the points made clear in the forward looking paper was that half of the recommendations will be ongoing consultation, which is what they have indicated to us in order assess the full impact of any implantation.

The Government will move to implement its response through the Parliament as soon as practically possible.

“Overall the FCA was happy with the process. We believe Alan Wein was very experienced and did a very thorough review. Not only did the government and a number of its departments get involved but the recommendations are a clear indication they listened to stakeholder and we were pretty satisfied with the recommendations,” De Britt said.

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