The Commonwealth Government has released a report on the review of the Franchising Code of Conduct.

The Franchising Code aims to strike a balance in relation to disclosure by franchisors and the rights of franchisees.

The report contains a total of 18 recommendations to Government.

The recommendations in relation to disclosure include a requirement for a franchisor to disclose the rights of the franchisor and franchisee to conduct and benefit from online sales, including any ability of the franchisor to conduct online sales.

There are recommendations relating to an obligation to act in good faith being inserted into the Code, and the introduction of civil pecuniary penalties for breaches of the Code.

There are also a number of recommendations aimed at addressing specific problematic areas, for example, the issue of franchisor failure.

No recommendation has been made that franchisees receive an exit payment or goodwill payment at the end of the term of their franchise agreement. However, a recommendation has been made that any restraint of trade clauses in the franchise agreement which prevent the franchisee from carrying on a similar business in competition with the franchisor, are not enforceable by the franchisor against the franchisee in certain circumstances.

The Government has not yet indicated its response to the recommendations.