FRANCHISING CONFLICT - TOWARDS GREATER UNDERSTANDING AND EFFECTIVE RESOLUTION
JEFF GIDDINGS1,LORELLE FRAZER2,SCOTT WEAVON3& ANTHONY GRACE4
1PROFESSOR & CONVENOR, GRADUATE PROGRAM IN DISPUTE RESOLUTION, GRIFFITH LAW SCHOOL
2PROFESSOR & DEAN (LEARNING & TEACHING), GRIFFITH BUSINESS SCHOOL
3 SENIOR LECTURER, DEPARTMENT OF MARKETING, GRIFFITH BUSINESS SCHOOL
4SENIOR RESEARCH ASSISTANT, GRIFFITH BUSINESS SCHOOL
INTRODUCTION
Australia has been described as ‘the franchise capital of the world’ (Walker 2004, p.36) because of its high level of franchising density and impressive growth in both franchise units and sector turnover. Some 62,000 franchise units belonging to 960 franchise systems, turned over $128 billion in 2005 (Frazer et al. 2006). Perhaps because of the sectors rapid development since the fast food chains were first established in the 1970s, it is not without its problems.
The Australian franchising sector continues to grow rapidly, with a 12.9% rise in the number of franchise systems between 2004 and 2006. It employed some 426,500 people and contributed 14% of Australia’s GDP (Frazer et al., 2006). In view of the sector’s significance to the national economy, it is surprising that greater attention has not been paid to the management of franchising conflict.
This paper outlines research being conducted as part of an Australian Research Council ARC)-supported study in conjunction with the Australian Competition and Consumer Commission (ACCC).[1] It builds on pilot research completed in conjunction with the ACCC in 2006-7 which revealed causes of franchise conflict relating to communication issues, financial concerns as well as business choices and unforeseen circumstances impacting on franchisees. Third parties such as lawyers, franchise consultants, accountants and franchise associations have all been identified as exacerbating conflict. While mediation-type processes have generally been seen as productive and efficient methods of...