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FCA slams appointment of franchise critic in South Australia
by Simon Lord, last updated on 2nd February 2012
The Franchise Council of Australia has spoken out following the appointment of a what it calls 'a self-proclaimed expert on franchising' to a key position in small business administration in South Australia.
The Franchise Council of Australia has slammed the appointment of franchise activist, academic Frank Zumbo, as Acting Small Business Commissioner for South Australia. This marks the latest development in the long-running saga of federal and state legislation of the Australian franchise sector. A 2009 survey suggested changes in regulation cost Australian franchisors $9 million in legal fees alone that year.
In a release to members, FCA Director Steve Wright says, 'Late last year, the South Australian (SA) Government followed the lead of Victoria, New South Wales (NSW), Western Australia (WA) and Queensland in appointing a Small Business Commissioner (SBC). Yesterday, the FCA welcomed the announcement to that office, especially if it is an office which, like the other States, focuses on quick and affordable dispute resolution. However, the FCA did not welcome the appointment of the Deputy - and Acting - Small Business Commissioner, academic Frank Zumbo, of the University of NSW.'
He goes on to explain, 'Associate Professor Zumbo has been an activist for new franchising legislation in SA, WA and elsewhere. A self-proclaimed expert on franchising, he has frequently described a need to toughen franchising legislation to eliminate unnamed “rogues” and has been an advocate for a new definition of ‘good faith’ negotiations between franchisors and franchisees - a concept rejected by the Federal Government, Labor and Liberal Governments in WA, and a series of thorough studies done by experts in competition and trade practices.'
'Mr Zumbo was paid consulting fees of $2000 a day (plus $7000 expenses) by the Government of SA in the lead-up to the introduction of the SA SBC legislation. During this period he conducted stakeholder meetings with a number of business representatives - but not with any member of the Adelaide-based franchising community as far as we can ascertain.'
'Mr Zumbo was appointed by Small Business Minister Tom Koutsantonis, who yesterday told Adelaide radio listeners his challenge was to “stop the suicides” and the “horror stories” in franchising. Mr Koutsantonis made the appointment without the position being advertised. He made the announcement on radio with Mr Zumbo at his side.'
'Against this background, it is impossible for Mr Zumbo to claim impartiality on franchising matters. Accordingly, the FCA has called on him to recuse himself from consideration of any franchising issue brought before the new SA SBC office. As a lawyer, he can be expected to take this request seriously.' Steve Wright promises, ' We will write to the SA Premier asking for his assurance that Mr Zumbo will not be appointed the full-time SBC.'
Surveys suggest there is little difference in franchise dispute levels between the regulated Australian market and unregulated New Zealand, although mediation and litigation are more popular in Australia.
See links below to FCA media releases and associated media reporting.
FCA media release: New SA commissioner will double red tape for national franchises
FCA media release: FCA raises more questions about Zumbo appointment
smartcompany.com.au: Franchise Council slams SA Government after appointing franchisee champion Frank Zumbo as deputy small business commissioner
The Australian: Liberals question adviser’s plum job
Adelaide Advertiser: Professor’s aim is for good faith
startupsmart.com.au: Frank Zumbo named SA deputy small business commissioner
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