Jim’s Group chief vows to continue WA franchising fight even if new laws are abandoned

Jim’s Group chief Jim Penman says he will continue his campaign for tougher franchise laws in Western Australia even if the current bill doesn’t pass, saying he is investigating the possibility of creating a state-based franchisee association.

The comments come after fast-food giant McDonald’s expressed its opposition to the legislation earlier this week, joining a chorus of franchisees and other businesses that have opposed the bill in submissions to a state inquiry.

Penman says the heart of the matter is that there is no voice for franchisees in Western Australian, and argues everything is being run by “franchisor opinion”.

“We’re looking at ways of getting a franchising association going. Obviously we can’t be members of it, but we’re looking at ways of getting funding and so on.”

“We’ve been discussing how we could go about doing this in various ways, but taking fees off of franchisees is not a good way of doing things.”

Penman says he will continue to fight for the legislation, which he says “doesn’t go far enough anyway”.

“I think the bill is good, but it doesn’t go far enough and I would be even more radical than that. I think every franchisor should be assessed once a year, and those results should be plastered all over the media.”

“I’ll be disappointed if it doesn’t get up, but it doesn’t go far enough anyway.”

The legislation has been met with opposition on all fronts, with the Franchise Council of Australia, the Law Council of Australia and the National Retailers Association all opposing the legislation, which they believe extends too much power to franchisees.

Key changes in the legislation would introduce a new good faith clause. Opponents say the bill’s backers want the new clause to act as a type of automatic contract renewal.

The Franchise Council also argues the new bill would allow for franchisees to file for damages against their franchisors, including pain and injury damages, while franchisors could potentially be liable for criminal charges if they break some of the new regulations.

Only two major franchisors have supported the bill – Jim’s Group and Competitive Foods, franchisor of Hungry Jack’s and the WA business of KFC.

Competitive Foods is currently embroiled in a battle with its franchisor, Yum, over the control of KFC outlets in WA. Chief Jack Cowen has been publically vocal about his support for the new bill.

Both Competitive Foods and Jim’s have been behind the “Fair Go Legislation” campaign, and Penman says they will continue their support.

“Jack’s got his own interests, but it seems to be the only situation where the company is acting as a franchisor. I just don’t see why giving franchisees a bit more security would be such a terrible thing,” he says.

“Why on earth should a franchisee get to the end of 10 years, and have their business taken away from them? Don’t their interests count?”

Spokesperson for Fair Go Legislation, Paul Plowman, says the issue at hand is education, and argues McDonald’s would not have opposed the bill if they knew what was in it.

“Most of the submissions to the inquiry haven’t substantially addressed the terms of reference. The bill is not retrospective, doesn’t include automatic right of renewals and is completely constitutional.”

“We respect the fact McDonald’s has a view on this, but having looked at the substance of their submission, we think some of the concerns they may have are unfounded.”