November 2019 | Stone Group Lawyers

Publications & News

Disclosure Practices By Food Industry Franchisors

In late August 2019, the ACCC released a report on its findings into disclosure practices by franchisors operating in the food industry.

The report highlighted several key areas where greater transparency and compliance is needed across many franchised industries:

  1. Franchisors are making it difficult for a prospective franchisee to contact former franchisees by failing to include practical contact details such as a mobile phone number and email address.
  2. There is a failure to adequately disclose what essential goods and products are subject to supply restrictions, meaning franchisees are not realising the full extent of what they can buy and who they can buy from until after they start operating their business.
  3. In many circumstances, franchisors are receiving rebates from suppliers, but whether or not the rebates are being shared with the wider franchise network is not being made clear.
  4. Unavoidable ongoing costs that franchisees will incur, such as rent and wages, are not being sufficiently disclosed, meaning franchisees are not realising the full extent of the cost of operating their business until after the business is up and running.

It was also found that over 40% of franchisees are not seeking independent professional advice from a lawyer, accountant or business advisor before entering a franchise agreement. This shows that franchisees are placing a high level of trust and reliance on the information disclosed by their franchisor, meaning a greater need for that information to be comprehensive and accurate.

Luke McKavanagh of the Stone Group Lawyers team recently discussed these findings and the implications for the franchising industry with Coast Business Radio. Listen to the podcast here.

Luke is an Associate with Stone Group Lawyers and is a regular contributor to online and print media for Inside Franchise Business. Luke is also a member of the Queensland Law Society Franchise Law Committee.

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Publications & News

Co-Parenting At Christmas

As the festive season approaches, the increase in parenting disputes inevitably arise, there are, however, ways to ensure that this Christmas ‘tis the season to be jolly’ is also child-focused. We make the following suggestions.

1. Check youR Court Orders or Parenting Plans for Christmas arrangements

Just as Santa will check off his list twice, you should do the same. Whether you have specific arrangements with the other parent in Court Orders or a Parenting Plan or you are to simply agree in writing. Now is the time to confirm with them your plans for the children’s Christmas time with you.

2. Changeovers

Ensure that you Jingle all the way to the pre-arranged changeover point as promptly as you can over the Christmas period. Christmas feasts or present unwrapping will wait for no man, women or child. Double-check that any external changeover points will be open on Christmas and take into account that it will be busier on the roads over the Christmas period. Where there are Orders in place, withholding the child even unintentionally could be considered as a contravention of those orders.

If your changeover will occur on Christmas Day, be mindful that your children may have already filled up on some delicious festive foods at breakfast or lunch, so perhaps allow them a few hours of playing with toys or a quick game of beach cricket before re-commencing their feast.

3. Travel

In search of a White Christmas this year? You should be aware that once a parenting application has been filed with the Court (even if no Orders have yet been made) or while a parenting Order is in force, it is a criminal offence to take a child who is the subject of that application or Order outside of Australia, except with the written and properly witnessed consent of the other party to the proceedings or Order of the Court permitting the travel. The maximum penalty for taking a child outside of Australia without that consent or an Order is three (3) years’ imprisonment.

Provide the other parent with an itinerary or flight details and confirm how the other parent will be able to communicate with the child whilst overseas. Don’t forget to confirm whether or not you will be travelling to a Hague convention signatory country as this may trigger a provision within the parenting orders (if any).

4. Presents

Tis the season of giving! If you can effectively communicate with the other parent, you should consider confirming what gifts you will each be giving to the child to avoid doubling up or perhaps even consider giving a joint present. After all, what is Christmas if it isn’t a time for forgiving and celebrating. Don’t forget to confirm with Santa what presents will be arriving to which household on Christmas morning too, the big guy in red has enough to worry about on Christmas Day as it is.

5. All is Calm, All is Bright

Children observe everything, so try to encourage and foster strong childhood memories of their Christmas. You may have disagreements or problems you have with the other parent, however Christmas time isn’t the time to bring them up, instead maybe consider giving a small gift to the other parent, like a Christmas photo of the children or ornament that your child made.

6. Home for Christmas

It won’t always be possible for the children to spend time with a parent over Christmas, in these circumstances, do your very best to facilitate communication between the parent and child on Christmas Day or take the opportunity to have your children send the other parent a small gift or letter in the mail.

7. If all else fails

Call us on 1300 088 440 to discuss your options. Keep in mind that if you can’t reach an agreement for Christmas, the cut-off date for filing Court Applications for Parenting Arrangements over Christmas is 15 November 2019 (i.e. the second Friday of November pursuant to Rule 5.01A of the Family Law Rules 2004).

Except in cases of urgency, any applications filed after this date will likely be heard after Christmas. As such you should consider alternative dispute resolution options for finalising Christmas Parenting Arrangements which we can advise you of further.

From the Family Law team at Stone Group Lawyers, we wish you a happy and safe Christmas.

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Publications & News

5 Things Franchisors Can Negotiate With Franchisees

Showing an openness towards working with a franchisee to negotiate a franchise deal will be an excellent foundation to your future business relationship.

A willingness to negotiate isn’t a sign of weakness. Rather, it demonstrates you’re reasonable and open to good faith discussions. It can also reduce the risk of the franchise agreement contravening unfair contract laws.

You don’t need to change the overall nature of your franchise agreement. There are 5 common negotiation points you can consider.

1. Term

Many franchisees want the comfort that the term and options under their franchise agreement will match those under their lease, along with the timeframes to exercise options. This is a reasonable request. You may also consider approaching the landlord to reach a middle ground. If a franchisee is pushing for additional renewal options, protect yourself through renewal criteria based on a franchisee’s continued compliance.

2. Fee Concessions

Agreeing to a period of reduced royalties or ongoing fees when the business opens for trade shows franchisees you’re aware it will take time to establish their business and customer base. Remember, you can place conditions on this, such as requiring the franchisee to follow a strict business and marketing plan during this period.

3. Exclusivity

Exclusivity can be contentious. Franchisees want it, franchisors are hesitant to give it.

If you don’t offer exclusive territories, and you’re asked for one, a compromise may be committing to not establish a neighbouring franchise within a certain radius of the business. This should be subject to the franchisee remaining in full compliance with their franchise agreement. An alternative may be giving the franchisee the first right of refusal to purchase that neighbouring franchise should you ever decide to establish one.

4. Social Media

Social media is the face of modern business. Franchisors can be hesitant to allow franchisees to advertise online. If this is requested, a well drafted social media clause will give the franchisee the flexibility to promote themselves through an online presence, but also give you a degree of control. Ensure you have provisions about pre-approval of content, an ability to direct removal of inappropriate posts, administrator access and for the account to be transferred to you when the franchise agreement ends.

5. Performance Targets

Many franchise agreements say that the franchisor can force a sale of the business if a franchisee fails to achieve performance targets. This can be harsh. If a franchisee asks to remove this, a good compromise would be a staged process.

First stage can be attending a meeting where a business and marketing plan for the franchisee must be agreed. Continued poor performance would then trigger a repeat of stage 1. Finally, if there’s no improvement, a forced sale would then be a reasonable consequence.

The Final Negotiation

After weighing up whether a negotiation point is reasonable and justifiable, always ensure what you’re negotiating won’t disrupt the uniformity of your franchise system, which is after all the foundation of a franchise’s success.

This article was previously published on the Inside Franchise Business website. You can view an online copy of the article here.

Luke is an Associate with Stone Group Lawyers and is a regular contributor to online and print media for Inside Franchise Business. Luke is also a member of the Queensland Law Society Franchise Law Committee.

Free Consultation

At Stone Group Lawyers, we offer all clients for all areas of law a free initial consultation for up to 30 minutes. This consult can be over the phone, Skype or in person.

Request your free consultation

Complete the form below to request a free 30 minute consultation.