Government Decision On Franchising “Jumps the Gun” – MTA

Government has been too fast off the mark in deciding there is no case for specialised regulation to handle franchising, according to the Motor Trade Association (MTA).

“Many of the public submissions made to the enquiry into this subject had suggested that more work needed to be done to get a real handle on the issue,” said MTA spokesman Andy Cuming, who was speaking following the Government announcement that no special measures were necessary to safeguard the interests of franchise partners.

“The Business School at the University of Auckland is now starting to produce the sort of extensive, empirical research findings that would lead to better decision-making on this,” he said.

The Business School is hosting a symposium on 25 June where local and international experts will present arguments for and against the introduction of specialised franchise regulation into this fast-growing business environment.

“It is a pity that Commerce Minister, Hon Stephen Power, will not be able to take advantage of the added insights these speakers will provide, at this forum next week that he himself is opening,” said Andy Cuming.

Andy Cuming said that new information that has come to light as the result of the extensive research included details of the extent to which claims being made by dissatisfied franchisees highlighted a particular need for disclosure that was currently not being met.

“Resolution of these types of concern within franchising would contribute substantially to further growth of this sector.

“The Australian experience has shown that specific franchise law better defines the rights and responsibilities of all parties. Here it would improve the legal framework around franchising in order to promote sector growth, development and innovation. Such definition is, therefore, of advantage to both franchisors and franchisees,” he said.

For further information please contact:     
Andy Cuming
Communications Manager
Motor Trade Association
Tel: (04) 3818803
Mobile: 027 2718191