Franchising in Australia : A History

This article provides an overview of the development of franchising within Australia since its inception, with a particular focus over the last fifty years. It begins by discussing the introduction of some of the major individual franchise systems, and then examines the growth in numbers of franchisees and franchise systems. The history of government policy responses, and the evolution of regulation in the sector, is then outlined. This is followed by an overview of the emergence of franchising industry associations, and a discussion of some of the major advances in research and education. Whilst some early systems were already in operation by the end of World War Two, it was not until the late 1960s and early 1970s that the sector began to have a substantial presence in Australia. Initial activity primarily occurred in the automotive, petroleum and, somewhat later, fast food industries. By 1992 there were an estimated 450 franchise systems operating in the country. By 2002 this had grown to 700, and then over 1,100 systems and 73,000 outlets in 2012. The first legislation relating to franchising emerged at the state level during the 1970s and 1980s when several states and territories created their own franchising Commissioners to collect levies in particular industries, such as tobacco retailing. Other state laws were also enacted in the 1970s to regulate franchising in specific industries such as real estate. At the federal level, a growing level of debate and numerous formal enquiries led first to specific laws for the petroleum industry in 1980, followed by a voluntary national Code of Practice for all sectors in 1993, and then ultimately to a mandatory nation-wide Franchising Code of Conduct in 1998. A franchise industry association, now known as the Franchise Council of Australia, first emerged in 1982. Specific education and research in the sector began in Australian universities in the early 1990s, and has continued to grow since then