true Lianne Dalziel <p>Thank you to the Franchise Association of New Zealand for allowing me the opportunity of today&#39;s Expo and Show Stopper Awards to announce and release a discussion document approved by Cabinet last week. The <em>Review of the Regulation of Franchising</em> discussion document will enable this vital and growing sector of the New Zealand economy to have a say about whether government needs to tighten the rules around franchising - not to the extent that we choke the innovation the sector is known for - but rather to facilitate confidence in the sector that was somewhat shaken by events of earlier this year, where we saw the unhappy sight of hard working people - many of them migrants to New Zealand - who had lost their hard-earned money to a scheme which is still being investigated.</p><p>It is for this reason that I invited the Hon Chris Carter to join me today, because he has taken a particular interest in this in his role as Minister of Ethnic Affairs.<br /></p><p>Unlike other jurisdictions, like Australia, there are no franchise-specific rules in New Zealand.&nbsp; Instead it is the standard laws that govern contracts and intellectual property that apply to franchises.<br />The key objective of the review, which will be supported by feedback from the sector, is to explore whether there is some form of franchise-specific regulation that could enhance the contractual arrangements that currently exist.&nbsp; </p><p>The particular focus is on whether those entering into franchise agreements have adequate information to make good business decisions, while ensuring that we don&#39;t impose unnecessary compliance costs on the sector that are disproportionate to the risks involved.</p><p>The discussion document identifies three aspects of the franchising relationship that may make a case for franchise-specific regulation:<br /></p><ol><li>Information imbalance:&nbsp; franchisees need to do their due diligence before entering into a franchise contract, but may not have all the necessary information, or know the right questions to ask, in order to make a well-informed business decision.&nbsp; Should franchisees be required to get independent advice before entering into an agreement or should there be a &#39;cooling off&#39; period to enable advice to be sought after the fact?</li><li>Cost of resolving disputes:&nbsp; there are few options available, particularly to franchisees, to resolve disputes when they arise.&nbsp; Legal processes such as arbitration and litigation can be expensive, and can be damaging to the franchise relationship which relies on cooperation and collaboration.&nbsp; Should there be a requirement for mediation?</li><li>Public perception:&nbsp; the public&#39;s confidence in the franchising sector may have been damaged following the cases which involve alleged fraud.&nbsp; It is important that there is confidence in the sector so that high quality business men and women are attracted to the sector, allowing it to continue to grow and prosper.<br />There are other issues that have been raised about various aspects of franchise contracts and these are included to seek feedback.&nbsp; </li></ol><p>The discussion document explores possible options to address these issues, ranging from the status quo, which is a self-regulation model but which doesn&#39;t address the concerns of those outside the Association, all the way through to a legislated regulatory framework that includes mandated Codes and conditions.</p><p>I invite all of you to take the Discussion Document and consider it and make your views known.</p><p>I am aware that there are plans next year for an international franchise conference focused on understanding the different regulatory approaches adopted throughout the world.&nbsp; The timing should be ideal for the government to be able to consider this alongside recommendations arising from this review.</p><p>Can I conclude by congratulating all of you for participating in this Expo and can I thank the Franchise Association for its advocacy for a sector that is a vital part of the New Zealand economy.&nbsp; Can I acknowledge the sponsorship of Westpac - these events don&#39;t happen without sponsors - and can I congratulate those of you who have been chosen as the &#39;show stoppers&#39; for going the extra mile. &nbsp;<br /><br /> </p> 2008-08-16 1

Commerce Minister's Speech on Franchise Review

684 August 2008 - The following is the text of the speech by Commerce Minister Lianne Dalziel at the Business Opportunities & Franchise Expo, Auckland, on 16 August 2008 2009-07-29 684-commerce-minister-s-speech-on-franchise-review