The Franchise Disclosure Register is now live, featuring the profiles of more than 1300 franchisors.
There was a last-minute scramble for franchisors to add information made mandatory three days before Monday’s deadline.
Despite the 11th hour flurry of activity, the site went live as scheduled yesterday. As of this morning, there are 1340 profiles listed.
Mary Aldred, CEO of the Franchise Council of Australia, said “The purpose of the Federal Government’s new disclosure register is to help prospective franchisees undertake due diligence prior to making an investment decision, and it is important that it meets this objective.
“The over 1,300 entries on the register captures the vast majority of franchisors in Australia, which highlights the strong commitment of franchise businesses to transparency and compliance.”
Number of registrations greater than expected
Stephen Giles, partner, Norton Rose Fulbright, told Franchise Executives the launch of the Register is a “significant win” for the sector.
“The number registered aligns closely with the broader survey estimates of the number of Australian franchise systems, and is well beyond the number most would have predicted,” he said.
The volume of registrations is even more impressive given the “complex and at times confusing implementation framework,” he said.
Ratings and information advisory firm FRANdata has welcomed the additional information now available through the Register.
Darryn McAuliffe, FRANdata Australia CEO, agreed there has been a “high level of early participation”.
“Based on our initial review, and after adjusting for some duplication and “regional” arrangements, more than 80 per cent of franchise systems that we track now have profiles on the Register,” he said.
Franchisors decline to add confidential information as the Disclosure Register launches
While very few franchisors submitted disclosure documents, a greater number have chosen to supply their Key Fact Sheet.
Giles said “The primary utility of the Register was always as a base list of franchise systems, and that is what the franchise sector has supported,” he said.
He believes this should eliminate further calls for mandatory provision of disclosure documents.
“Franchisors have shown that where it makes sense to provide additional information, they will consider providing it. Similarly, where it makes no sense, and indeed puts confidential information in the public domain, the option has been rejected.”
McAuliffe said the Register has already achieved its goal of “increased franchisor transparency”.
“The more ambitious goal of ‘assisting prospective franchise buyers to make an informed decision’ will rely on creating awareness of the existence of the Register, and the individual’s ability to draw meaningful insights from the information presented,” he said.
The FCA has its eyes on the next step of government oversight.
Aldred said the association will continue “to liaise with the Federal Government and Treasury on the performance of the register, with an eye towards contributing to the government’s statutory review of the register in 12 months.”