New car dealers want to be treated fairly

The Victorian Automobile Chamber of Commerce has welcomed the federal government’s review of the ‘Franchise Code of Conduct’ and, in response to calls for submissions, it has contributed to two reports.

These reports have been delivered to Alan Wein, appointed by former minister for small business, Brendan O’Connor, to review the Code.

“We urge Mr Wein and the Federal Government to address the concerns of small business franchisees,” says David Purchase, VACC executive director.

95% of Australia’s businesses are small businesses and yet, many are controlled by the remaining 5%. Big organisations, many of which are franchisors, dictate terms, influence business decisions, exert pressure and threaten to terminate agreements if things don’t go their way.”

New car dealers, like Australian Automobile Dealers Association (Vic) chairman, and proprietor of Essendon Nissan, Tony Sitch, consider themselves different to other franchisees because of the size and scale of their investment in land, stock, equipment and branding.

“A new car dealer’s floorplan and commitment to stock is much larger than say a coffee shop. The code needs to provide better disclosure on investment, prime market areas and good faith,” says Sitch.

Submissions on behalf of the wider retail automotive industry – including automotive component part specialists, retailers, service centres, body repairers and car rental businesses – was produced by VACC’s national retail automotive industry body, the Australian Motor Industry Federation (AMIF).

“Small business is not always listened to or taken seriously by their big business partners. Small business owners do not want to bring down big business; this is not David and Goliath. They simply want an even playing field and to be treated fairly,” says Purchase.

“The Franchise Code of Conduct should be symbiotic as both parties need each other. The review needs to redress the balance of power and protect small business owners,” says Purchase.