‘Inherently unfair’: the human misery of franchising

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Franchising by its very nature is inherently unfair, says former Brumby’s franchising chain founder Michael Sherlock.

Speaking in Brisbane at the parliamentary inquiry into franchising, Sherlock didn’t pull any punches. He said franchise agreements lacked transparency, the current Franchising Code of Conduct didn’t stop franchisors gouging franchisees and the regulator, the Australian Competition and Consumer Commission (ACCC), needed to be better resourced.

If not, the human misery will continue.

Michael Sherlock is the founder of the Brumby's bakery chain. He is vocal about the franchise industry.

Michael Sherlock is the founder of the Brumby’s bakery chain. He is vocal about the franchise industry.

Photo: Jason South

Sherlock offered up a few solutions: more transparency into the marketing fund and size of rebates, and a requirement by franchisors to list all the fees franchisees are required to pay each year.

The inquiry heard a cross-section of witnesses, including lawyers, franchisees and a mediator, all proffering different views. Some believe the sector needs reform, others believe the high-profile scandals – 7-Eleven, Retail Food Group, Pizza Hut, Domino’s, Caltex, Mortgage Choice, Foodco and Craveable Brands – are a few bad apples and the code is working well.