Underneath the Golden Boy - Robson Hall Faculty of Law

Franchise Legislation and Associations Around the World 383
existing franchise agreement. Upon termination, a franchisor must, within 14
days, return all payments made by the franchisee to the franchisor under the
agreement. However, the franchisor may deduct from the amount reimbursed to
the franchisee the franchisor’s reasonable expenses if the expenses or their
method of calculation have been set out in the agreement. 138
The Code also contains a specific part that deals with resolving disputes
between franchisors and franchisees by way of mandatory mediation. The aim of
such a provision is to offer a prompt and less costly option to litigation in the
courts. 139 The procedure the complainant must follow commences with an
obligation to tell the respondent, in writing, the nature of the dispute, what
outcome the complainant wants and what action the complainant thinks will
settle the dispute. The parties should then try to agree about how to resolve the
dispute. 140 If the parties fail to come to an agreement within three weeks, either
party may refer the matter to a mediator. In addition, if the parties cannot agree
about who should be the mediator, either party may ask the mediator adviser to
appoint a mediator. 141 Foreign franchisors must note that all mediation under
The Code must be conducted in Australia. 142
If parties fail to come to an agreement, mediation efforts will be terminated
if at least 30 days have elapsed after the start of mediation. Moreover, if either
party asks the mediator to terminate the mediation, the mediator must do so.
However, a mediator may refuse to terminate the process if he is satisfied that a
resolution of the dispute is imminent. 143 Parties will be held equally liable for the
costs of mediation under the Code, unless they agree otherwise, and they must
pay for their own costs of attending mediation. 144
The Franchise Council of Australia (“FCA”), created in 1983, represents
franchisees, franchisors and services provides in the franchise industry. The
FCA’s goals include establishing standards of international best practice in
business format franchising for Australian franchise systems; providing
information and education about franchising to existing and potential
franchisees and franchisors; lobbying state and federal governments on issues
relevant to the sector; developing a vital, strong and financially viable
138
Ibid. at s. 13.
139
Report of the Franchising Policy Council, supra note 129 at 43.
140
Trade Practices (Industry Codes – Franchising) Regulations 1998, supra note 130 at ss. 29(1)
and (2).
141
Ibid. at s. 29(3).
142
Ibid. at s. 29(5A).
143
Ibid. at s. 30A.
144
Ibid. at s. 31.