Government Endorses Franchising Code Changes for the Automotive Sector


The Australian Government has now responded to the Independent Review of the Franchising Code of Conduct led by Dr. Michael Schaper, endorsing all 23 recommendations. This response acknowledges the necessity of achieving a fairer balance between franchisees and franchisors within the automotive sector. Notably, the extension of the Franchising Code's coverage to include various automotive retailers beyond car dealers is welcomed, providing broader protection across the industry. Additionally, clarifying that service and repair work by motor vehicle dealerships falls under the Code's scope is also seen as a positive step.

However, there remains recognition that further efforts are needed to ensure the Franchising Code remains effective in a rapidly evolving automotive retail landscape, particularly with the transition to electric vehicles (EVs) introducing new business models and potential power imbalances. The MTAA has stressed the importance of safeguarding franchisees, predominantly small to medium businesses, from misconduct and opportunistic behavior, highlighting ongoing collaboration with the Treasury Taskforce to address these critical issues comprehensively.

To read the full media release from the MTAA, click here.

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