Brumby’s Bakery joint founder Michael Sherlock has called for urgent reforms to the board of the Franchise Council of Australia (FCA) following “a series of disasters for the nation’s franchising sector”.
Mr Sherlock, now Chief Marketing Officer at shopping-centre owner Sentinel Property Group, says a lack of leadership from the FCA has been a key factor in the issues confronting franchising, headed by the troubles at ASX-listed Retail Food Group. He has suggested several improvements.
“We need to reform the FCA board so it better represents franchising, which is an essential sector of the Australian economy,” he said.
“The membership criteria of the FCA should be amended so that only current established franchisors and franchisees are able to be appointed and serve on the board.”
Mr Sherlock says reforms to the FCA’s membership structures are also needed. He suggests franchisees should be encouraged to join the council with proportionate joining fees, while consultants, lawyers and accountants and other professional-service providers should have restricted membership.
“They shouldn’t be eligible to serve on the board,” he said of these groups, adding that their representatives should be restricted to attending “only attend limited parts of FCA meetings and gatherings”.
“The make-up of the board should be structured to encourage the large established systems to have some representation,” he added.
Mr Sherlock also recommends that franchisor board members should have a minimum five years’ trading experience and a minimum of 30 franchisees, as well as a history of ethical trading, while franchisees should have a similar track record to be eligible to join the board.
There are already moves for a federal parliamentary inquiry into the $170 billion franchise sector, with federal Nationals Senator John Williams reportedly working closely with Small Business Minister Craig Laundy on the proposed terms of reference.
