FCA Member Standards
The FCA Member Standards promoting excellence in franchising
One of the hallmarks of a reputable industry sector is a commitment to high standards of personal and professional conduct. The FCA’s Member Standards are framed to enhance public perceptions of franchising, help safeguard the investments of franchisors and the businesses of franchisees, protect franchise networks from unfair or unethical attack, and provide guidance for those seeking to commence their franchising journey.
The Franchise Council of Australia (FCA) encourages its members to maintain standards of conduct worthy of franchise sector professionals. These Member Standards are designed to provide members of the FCA with an authoritative guide on acceptable standards of conduct.
The FCA believes the Australian franchise sector to be well regulated, with the Franchise Code of Conduct (“the Code”) allowing for adequate dispute resolution procedures and disclosure provisions to assist and guide the sector. It also considers that the franchise relationship between the franchisor and franchisee can be developed even further with best practice guidelines in the form of Member Standards.
It is the FCA’s view that members gain significant market benefit in identifying themselves with the FCA and, as such, the business practices and activities of members should work towards franchise best practice.
The Member Standards do not seek to pre-empt every franchise relationship; rather, they serve to articulate values upon which FCA members can structure their franchise relationships and should conduct their businesses.
If members do not comply with FCA Member Standards, investigative and disciplinary processes will be enacted. It is not intended for breaches of FCA Member Standards to have legal consequences other than in relation to membership of the FCA. Clause 2.10(1)(b) of the FCA Constitution empowers the FCA Board (by a 75% majority) to censure, suspend and/or expel from the FCA any member who fails to comply with FCA Member Standards.
The FCA will respond to any complaint regarding alleged breaches of FCA Member Standards, but does not have sufficient resources to vet documentation, audit behaviour or generally police compliance. Use of the FCA logo by FCA members does not constitute endorsement or certify compliance, and the FCA accepts no liability whatsoever in relation to any breach of these Member Standards.
Franchising Activities
All Franchise Council of Australia members are expected to conduct their franchising activities professionally and in accordance with Australian law. They are expected to comply with agreed minimum standards of conduct.
The FCA considers the following standards apply to its members:
- Members of the FCA shall abide by all relevant state and federal laws, including in particular the Franchising Code of Conduct and the Competition and Consumer Act 2010 (Cth) (previously known as the Trade Practices Act 1974). A member shall, within 14 days of receiving a written request from the FCA, furnish the FCA with a copy of its current disclosure document, franchise agreement, and any other documentation or advertising material used in connection with the appointment of a franchisee.
- No FCA member shall imitate the trade mark, trade name, corporate name, slogan, or other mark of identification of another member of business in any manner or form that would have the tendency or capacity to mislead or deceive.
- An FCA member – whether a franchisor, vendor franchisee, franchise broker, or representative of a franchise system – should not sell a franchise if the member knows, or ought to know, that a reasonably competent franchisee would be unlikely to be able to successfully operate the franchise.
- Members are expected to behave professionally and refrain from illegal, unethical or improper dealings, or otherwise act in a manner prejudicial to the reputation of franchising or to the FCA.
Standards applying to franchisors and franchisees
- A franchisor shall, as part of its franchisee recruitment process, undertake reasonable inquiries to assess whether a prospective franchisee possesses the basic skills and resources to adequately perform and fulfil the operational requirements of the franchise.
- The franchisor shall have training and support processes, applicable to its franchise system, to help franchisees improve their abilities to operate their franchises. Franchisees will make every endeavour to apply this training to their operations.
- Franchisors and franchisees should be reasonably accessible to each other and responsive to communications, and provide a mechanism by which ideas may be exchanged and areas of concern discussed to facilitate mutual understanding and reaffirm the good faith of the relationship.
- Franchisors and franchisees shall endeavour to resolve complaints, grievances and disputes through direct communication and negotiation. Failing this, consideration should be given to mediation or arbitration.
- Franchisors and franchisees should, in their dealings with each another, avoid:
- Substantial and unreasonable overvaluation of fees and prices; and
- Unnecessary and unreasonable conduct beyond that desirable for the protection of the legitimate business interests of the franchisor, franchisee or franchise system.
Standards applying to FCA members who are suppliers to the franchising sector
- A member who is a lawyer, accountant, consultant or other supplier or service provider (“Supplier Member”) should behave in a manner consistent with these guidelines.
- Respect the integrity of established franchise systems, and not seek to inflame any dispute, incite litigation, generate adverse media coverage or otherwise act in any way which is unprofessional
- Provide a client or prospective client, on request, with a written resume or profile of any relevant qualifications of the supplier member, together with accurate representations of the supplier’s franchising education and experience;
- Respect the confidentiality of all information received concerning a client’s business which is not in the public domain, and not disclose or permit disclosure of such information without the client’s express prior written permission;
- Not advise any franchisee (or prospective franchisee) in relation to any franchise opportunity offered by any franchisor for whom the adviser has acted, without full disclosure of relevant circumstances;
- Disclose to a client or prospective client any personal or financial interests or other material circumstances which may create a conflict of interest in respect of that client and in particular, without derogating from the generality of the foregoing:
- Any directorship or significant interest in any business which competes with the client;
- Any financial interest in goods or services recommended by the adviser for use by the client;
- Any personal relationship with any individual in the client’s employment;
- Not undertake work for which they are not appropriately licensed, qualified and experienced.
