PIZZA HUT – What is reasonable for franchisees?
1. What is “reasonable” behaviour for franchise businesses in Australia?
The duty of franchisors to act reasonably should be independently assessed so that reasonable for the franchisor is equally reasonable for the franchisee. Bob Jacobs, from Auxilium Partners in Perth and liquidator of several Pizza Hut franchise businesses, is requesting the High Court of Australia to clarify recent rulings which appear to permit franchisors to behave with un equal reasonableness using the excuse that acting in good faith is acting reasonably. Bob says how is good faith measured in today’s world, what is reasonable and for whom?
2. How do franchisors exercise their duty to act reasonably and in good faith when conducting their business?
Good faith means different things to different people and most would agree the concept of good faith seems to mean something different in 2018 compared to 1918 when the ANZAC’s came home! The Code of Conduct for franchise businesses in Australia was written by and on behalf of franchisors to protect them from adverse behaviour by franchisees with little thought for franchisee protection from adverse behaviour by franchisors