{"id":181,"date":"2020-11-09T11:05:00","date_gmt":"2020-11-09T11:05:00","guid":{"rendered":"https:\/\/epo2023.appletest.com.au\/?p=181"},"modified":"2024-02-16T15:11:00","modified_gmt":"2024-02-16T15:11:00","slug":"understanding-franchisor-responsibilities-in-australia","status":"publish","type":"post","link":"https:\/\/www.epayoffice.com.au\/understanding-franchisor-responsibilities-in-australia\/","title":{"rendered":"Understanding Franchisor Responsibilities in Australia"},"content":{"rendered":"\n
In recent years, there has been a number of workplace law amendments that affect franchisors.<\/p>\n\n\n\n
These amendments greatly influence the way in which a franchisor is legally liable for the actions of a franchisee. They serve as a guideline to help the Fair Work Ombudsman determine whether a franchisor is legally liable or not. If found liable, a franchisor may be subject to enforcement action, fines, and penalties in accordance with the Fair Work Act 2009 (FW Act).<\/p>\n\n\n\n
To help you understand what these amendments mean to franchisors, and how to prevent the risk of a franchisee breaching Australian workplace laws, read on. But first, let\u2019s define exactly who <\/em>a franchisor is.<\/p>\n\n\n\n Under the FW Act, there are three primary factors that determine whether an entity is considered a responsible franchise entity <\/strong>or not. They are as follows:<\/p>\n\n\n\n This means a franchisor allows another business to use their branding, trademark, and brand reputation in order to sell their products and services and generate an income.<\/p>\n\n\n\n This means a franchisee uses a major portion of a franchise brand, including the trademark, logo, and marketing in order to promote and operate their business.<\/p>\n\n\n\n The franchisor plays a major role in how each franchisee runs their business. They may assist in the daily operations of each business in a number of ways, including their products and services, branding, marketing, logos, hours worked by employees, sales targets, quotas, business expenses, and more.<\/p>\n\n\n\n In addition to this, the franchisor not only influences how each franchisee is run, but also financially contributes to the daily operations of the franchisees.<\/p>\n\n\n\n Under the right circumstances, a responsible franchise entity may be legally liable for contraventions done by a franchisee which violate the provisions of the FW Act.<\/p>\n\n\n\n These include contraventions that violate the:<\/p>\n\n\n\n Responsible franchise entities must take reasonable steps to ensure each franchisee is compliant with the FW Act provisions. Failure to do so could result in enforcement action, fines and penalties, for which the franchisor will be legally liable for.<\/p>\n\n\n\n A franchisor may be legally liable if they:<\/p>\n\n\n\n To avoid being legally liable for a workplace contravention done by a franchisee, the franchisor must take reasonable steps to prevent all relevant contraventions that apply to their franchisees.<\/p>\n\n\n\n The Fair Work Ombudsman (FWO) takes into account several factors to decide if a franchisor has taken reasonable steps to prevent a workplace contravention. These include:<\/p>\n\n\n\n Simply monitoring the activity of each franchisee may not be enough to avoid legal liability. For those who are unsure if their processes and procedures are enough to avoid legal liability, they should take these extra steps:<\/p>\n\n\n\n When a responsible franchisor is found legally responsible for the misconduct of a franchisee, a court can make a range of orders. They may force the franchisor to pay compensation to the franchisee\u2019s employees. The franchisor may also be forced to pay a penalty for each contravention.<\/p>\n\n\n\n The amount for each penalty can range from $13,320 for individuals and $66,000 for corporations.<\/p>\n\n\n\n Responsible franchisors are allowed to apply to a court to recover money from the offending franchisee in order to pay these penalties. The only exception to this rule is if the franchisor is required to pay penalties. In this case, the franchisor cannot recover from the franchisee under the FW Act.<\/p>\n\n\n\n Take the time to review the existing arrangements in place for your franchisees. Make sure there are systems, methods, and procedures in place to help reduce the risk of a contravention in workplace laws.<\/p>\n\n\n\n Franchisors can also access a wealth of free resources courtesy of the FWO, which can help them better understand their legal rights and obligations; not just for themselves, but also for participating franchisees.<\/p>\n\n\n\n For more information on franchisor responsibility and liability click here<\/a>.<\/p>\n\n\n\n E-Payoffice has a Franchise solution whereby the applicable award rules and rates can be set up at Franchise level ensuring that each Franchisee pays the correct penalties, loadings and overtime rates. Everything is transparent and visible by the Franchise, ensuring peace of mind.<\/strong>Request a FREE demo of E-Payoffice today<\/strong><\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":" In recent years, there has been a number of workplace law amendments that affect franchisors. These amendments greatly influence the way in which a franchisor is legally liable for the actions of a franchisee. They serve as a guideline to help the Fair Work Ombudsman determine whether a franchisor is legally liable or not. If […]<\/p>\n","protected":false},"author":1,"featured_media":182,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10],"tags":[],"yoast_head":"\nWho is considered a franchisor?<\/h2>\n\n\n\n
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Types of offences (contravenes) a franchisor is responsible for<\/h2>\n\n\n\n
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When could a franchisor be liable?<\/h2>\n\n\n\n
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How franchisors can prevent workplace contraventions<\/h2>\n\n\n\n
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Fines and penalties<\/h2>\n\n\n\n
Steps for franchisors to take now<\/h2>\n\n\n\n