Cutler Hughes Harris - South Australian and Western Australia State Governments review franchising
According to Cutler Hughes Harris, the catalyst for the Western Australia review appears to be a decision by Yum Restaurants not to renew franchise agreements for 50 KFC franchised stores in Western Australia. The franchisee (who is associated with Jack Cowin) has apparently said that Yum offered to buy the 50 KFC outlets at a price that the franchisee thought did not recognise 38 years of goodwill.
The terms of reference include a review of the adequacy of existing State and Federal legislation; to identify whether there are trends in relation to unconscionable conduct and whether franchisees had adequate remedies. The inquiry is being asked to consider including a ‘good faith’ obligation into the Code which may have serious consequences if it were to apply to renewals or extensions of franchise agreements.
South Australian and Western Australia State Governments review franchising