Updated on 02/15/2024
A. Macro-economic data
• Données générales [1]
- Population 2023: 26,638,544 inhabitants
- Area: 7,692,300 km2
- Density 2022: 3.4 inhabitants/km2
- GDP (nominal) 2022: $1,702.6 billion (12th)[2]
- GDP/capita 2022: $64,491.40
- GDP (PPP) 2022: $1,828 billion (20th)
- GDP (PPP)/capita 2022: $66,500[3]
- Growth rate 2022: 3.0 %
- GNI/capita (PPP) 2022: $68,888
- HDI 2021: 0.951 (5th)
- Literacy rate: 99 %
- Life expectancy 2022: 83.3 years
I. Economic data
Policy [4]
Australia, which belongs to the Commonwealth, is a federal State comprising six federated States and two territories.
Australia is a constitutional monarchy. The Head of State is King Charles III, represented by the Governor-General of Australia, David Hurley, who has held this office since July 1, 2019.
At the time of writing, in early 2024, Anthony Albanese, of the Labor Party has been the Australian Prime Minister , since May 21, 2022. On the day of his election, the Prime Minister set out five priority actions: equal opportunities, building an inclusive economy, health sector reform, better representation of the First Peoples in political institutions and the environment.
Economic development
As a member of the G20, Australia ranks twelfth worldwide in nominal GDP and fifth in nominal GDP per capita.
For 26 years, Australia's economic growth was uninterrupted. Despite the recession that hit developed countries in 2009, Australia posted a growth rate of 1.3% and maintained a high level of consumption.
It was during the Covid-19 pandemic that Australia experienced a period of recession. In 2020, its growth rate dropped to -2.4%. However, by 2021, Australia's growth rate was 5.2%, then reaching 3.6% by 2022.
Australia is experiencing inflation of 6%[5] , the highest level the country has ever seen. This high level of inflation has forced the Australian central bank to adopt interest rates of 4.10%.[6] Despite this high rate of inflation, Australia is still below the world average, which according to a study by the International Monetary Fund was 6.9% in 2023. [7]
Resources
Australia's resources are mainly mineral (silver, bauxite, coal, copper, diamonds, iron, nickel, gold, zinc), hydrocarbon (natural gas, oil), agricultural (wheat, sugar cane, cotton, barley, grapes, wine, cattle) and industrial (steel, aluminum, automobiles, high-tech).
Population
Although the average population density is around 3.4%, the urbanization rate is 86.4%[8] . The population is mainly concentrated into certain regions (in the east of the country: Australian Capital Territory, Victoria, New South Wales, Queensland) and mainly on the coasts, with large swathes of the territory being very sparsely populated (South Australia, Western Australia, Northern Territory, Tasmania).
Australia has several major coastal cities. Brisbane, Sydney, Melbourne and Adelaide are home to almost 80% of Australia's population. These four cities are therefore Australia's four economic hubs.
Australia's ten most populous cities are Sydney (5,045,489), Melbourne (4,812,122), Brisbane (2,379,489), Perth (2,024,894), Adélaïde (1,389,214), Gold Coast (539,489), Canberra (431,380), Newcastle (308,112), Wollongong (305,880) and Geelong (183,144).[9]
Australia is heavily involved in international trade and fosters the export of its goods and services, notably through the Australian Trade Commission (Austrade), whose role is to help Australian companies export their products. Australia helped found the Asia-Pacific Economic Cooperation (APEC), founded in Canberra in 1989.
Foreign investment
Australia encourages foreign investment. It is one of the most open to foreign investment among OECD countries. According to the AT Kearney 2023 Foreign Direct Investment Confidence Index[10] , Australia ranks tenth among the most attractive economies for foreign investment.
Foreign direct investment inflows in 2019 amounted to $36.1 billion[11]. The European Union is the leading foreign investor, with $14.5 billion invested in 2019[12].
[1] Unless otherwise stated, the general data comes from the Bureau australien des statistiques (ABS)
[2]Statistiques sur l’Australie de la bibliothèque de l’OECD
[3] Idem
[4] Atlas socio-économique des pays du monde, Larousse, édition 2024
[5] The information below comes from the presentation of Australia on November 11, 2023, by the French Ministry for Europe and Foreign Affairs.
[6] Source : Ministère de L'Economie, des Finances et de L'Industrie
[7] Idem
[8] International Monetary Fund Report, World Economic Outlook, October 2023: Divergent Paths.
[9] Données de 2021 sur Wikipedia
[10] Wikipedia se fondant sur CITY POPULATION
[11] Source : KEARNEY
[12] Statistiques de l’OCDE sur l’investissement direct international 2020
[13] Idem
B. Economic data specific to franchising
Historical background
Franchising began to develop significantly in Australia in the early 1970s, with the arrival of fast-food chains from the USA.
Franchising has now become the classic business format in Australia, and has expanded into virtually every business sector. Due to robust growth, franchising has gone from being a specialized marketing technique to an innovative and competitive means of expanding the retail product and service industries.
Trade shows
The Franchising and Business Opportunities Expo is held annually in Brisbane, Melbourne, Perth and Sydney[15] .
Statistics
According to the Franchise Council of Australia's 2023 State of Franchising report[17], the franchising sector comprises more than 1,267 networks and 94,000 individual franchised outlets. As of June 30, 2022, nearly 2.6 million businesses were operating in Australia.
Franchised stores are mainly in the retail sector (11%), food stores (9%), and fast food (69%).
Franchisors are mainly active in the following sectors: personal vehicle retailing (30%), fuel retailing (24%), retail trade (11.7%), accommodation and catering (8.8%) and administration and support services (6.8%).
95% of franchisors are companies with fewer than 20 employees. Nearly 300 franchise systems have been in operation for more than 20 years.
Institution
The franchise sector is organized within an association. The Australian Franchise Council (FCA)[13] was set up in 1983, and every two years publishes a survey on the state of franchising in Australia (Franchising Australia survey), carried out by Griffith University.
The Australian Franchise Council has also created the Excellence in Franchising awards, at national and regional level, to recognize the work of companies or individuals in the franchising sector. These awards are an opportunity for the companies concerned to promote their activities and stand out from the crowd[14] .
Contract content
In practice, the majority of franchise contracts are entered into for a period of either five or ten years. 30% of franchisees have been operating a franchise for between 5 and 10 years, and almost 40% of franchisees for more than 10 years.
When starting up a franchise, franchisors charge an initial franchise set-up fee, which varies according to the type of franchise. This cost is highest in the retail sector, where it can exceed $1 million.
Franchise fees are calculated on the basis of the number of sales, and are generally 5-6%. [18]
Economic impact
According to the Franchise Council of Australia's 2023 State of Franchise report[20], franchising represented a $174 billion market in 2023. The sector employed 574,000 people in 2023.
International
A 2021 survey report by the Franchise Council of Australia[21] shows that over 40% of franchisees surveyed were not Australian. The majority of franchisees' country of origin was India (15%), China (7%) and the UK (3%). [22] This shows a clear increase in the number of foreign franchisees, as in 2008, 91% of franchise networks were Australian born.
Statistics
South Africa has around 800 franchise systems, spanning 14 sectors [23]. In 2018, there were 45,011 outlets in South Africa. 84% of franchisees rate their relationship with the franchisor as very good or good [24].
South Africa is now home to 68,000 franchisees [25]. 40% of them are based in the Gauteng province [26].
The biggest sector in the franchise business is fast food. South Africa has around 85,000 restaurants and over 850 franchises. The international food market is estimated to be worth $4.9 billion by 2026 [27].
In 2022, South Africa had 1,907 businesses and companies in a state of bankruptcy [28].
Special features
The first peculiarity is related to the size of the Australian territory, which crosses three time zones: some franchisors (just over a quarter) use master-franchising within Australia itself to overcome the difficulties caused by the distance separating them from their franchisees.
Another special feature is the growing success of part-time franchising. Under this system, franchisees devote an average of twenty-five hours a week to their franchised establishment, in addition to another business activity or time devoted to family obligations.
[14] Tel : +61 3 9508 0888 ; postal address : Level 3, 21 Victoria St, Melbourne VIC 3000 ; adresse électronique : info@franchise.org.au
[15] To participate in the regional competition, applications opened on September 11, 2023, and for the national level, applications opened on October 9, 2023.
[16] The upcoming exhibitions will take place on May 4 and 5, 2024, in Sydney (Sydney International Convention Centre), on August 17 and 18, 2024, in Melbourne (Melbourne Convention and Exhibition Centre, Entrance 1), on March 29 and 30, 2025, in Brisbane (Brisbane Convention and Exhibition Centre), and on November 9, 2025, in Perth (Crown Perth).
[17] The statistics below come from the State of Franchise report 2023 du Franchise Council of Australia
[18] Idem
[19]Source : Broker.com.au
[20] Statistics below come from the State of Franchise report 2023 du Franchise Council of Australia
[21] Idem
[22] State of Franchise report 2021 du Franchise Council of Australia
[23] Source : Franchise.org
II. Legal information
A. Legal information directly related to the franchising
Applicable legislation
In 1998, Australia introduced Business Practices Regulations, including the Franchising Code of Conduct[23], to regulate the relationship between franchisor and franchisee. After numerous amendments, the Franchising Code of Conduct has been incorporated into a new, more comprehensive set of Regulations, replacing the previous one, which came into force on January 1, 2015[24]
This law applies to franchise agreements which, under section 5 of the Franchising Code of Conduct, are contracts:
- written, oral or implied;
- whereby the franchisor grants the franchisee the right to operate a business offering, supplying or distributing goods or services in Australia according to a business system determined, controlled or suggested by the franchisor or an association of franchisors, and
- under which the operation of the business is associated with a trademark or commercial symbol owned, used or licensed by the franchisor or franchisor association, and
- under which the franchisee must pay the franchisor or franchisor association a sum including, for example, an entry fee, royalties and training costs.
Franchise agreements are also governed by ordinary contract law and by the Trade Practices Act 1974[25], which was consolidated in 2010 by the Competition and Consumer Act 2010[26].
Pre-contractual information
According to Section 9 of the Franchising Code of conduct, the franchisor must provide the franchisee with an information document 14 days before the signing of the contract or the payment by the franchisee of any non-recoverable sums. This document must be updated annually, no later than 4 months after the franchisor's financial year-end.
The information required by the Franchising Code of Conduct, the content of which is set out in Section 8 of the Code, is important. Less detailed information is provided for franchisees with the lowest foreseeable turnover. Appendices 1 and 2 of the Franchising Code of Conduct set out the outline to be followed by the document issued, depending on whether the information required is full or less detailed.
This information must be provided not only to prospective franchisees, but also to franchisees whose contracts are renewed or extended, or whose scope is extended.
Sub-franchisees must receive two sets of information (from both the master-franchisor and master-franchisee).
The Franchising Code of Conduct also lays down the layout of the information document.
Trademarks
Australian trademarks are registered with IP Australia. As Australia is a signatory to the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Trademarks, the classes are identical to those used, in particular, by the NIIP (France’s National Institute of Industrial Property).
Australian trademark registration is valid for ten years and can be renewed indefinitely.
Australia is also a member of the Paris Union. As a member of the World Trade Organization, it is bound by the TRIPS Agreement. Finally, as Australia is a member of the Madrid System, an Australian trademark can be registered through the international trademark system.
The Madrid system[29] enables companies to obtain trademark protection in up to 130 countries by filing a single international application, in a single language, with the World Intellectual Property Organization (WIPO). Under Article 6 of the Madrid Agreement, trademark registration is valid for 20 years.
To go further
In Australia, trademark applications can be handled both nationally and through WIPO. Examinations cover both relative and absolute grounds. Multi-class applications are accepted. For trademarks filed before 24 February 2019, they become vulnerable after five years from the filing date. For trademarks filed after this date, they become vulnerable three years after registration. To develop a franchise in this country, it is advisable to cover "Business assistance relating to franchising" and "retail services" which are both accepted under class 35 by the trademark office, with retail services requiring specification of the area. Recording a franchising agreement is not compulsory though advisable for legal advantages.
Contract perfomance
The franchisee has a right of withdrawal for seven days following the signing of the contract or the payment of non-recoverable funds[27] .
Furthermore, the franchisor may not prevent the franchisee from participating in a franchisee association. In addition, the franchisor must keep franchisees informed of certain events affecting the franchisor (e.g., change of control, legal proceedings and rulings against the franchisor). The franchisor's right to oppose the transfer of the franchise is not discretionary.
The Franchising Code of conduct also contains provisions concerning termination of the contract by the franchisor, and thus sets out the procedures for termination of the contract for non-performance of obligations by the franchisee, which in principle involves formal notice. The Franchising Code of conduct also provides for a series of cases in which the franchise agreement may be terminated without notice by the franchisor.
Jurisdiction and applicable law
Australia has signed and ratified the 1980 Vienna Convention on Contracts for the International Sale of Goods[28]. This convention applies exclusively to contracts for the sale of goods for professional use (Section 2 of the Convention). The Vienna Convention governs only the formation of the international sales contract and the rights and obligations of the seller and the buyer. However, the validity of the contract, as well as the effects of the contract on ownership of the goods sold, are not governed by the Vienna Convention. This Convention overrides national law when the parties’ place of business are in States that are party to the Convention.
[24] Règlement n°162, 1998 (Statutory Rules 1998 N°162)
[25] Règlement n°168,2014 (Select Legislative Instrument N° 168,2014)
[26] N°51,1974
[27] Compilation N°147
[28] Article 29 du Franchising Code of conduct
[29] Convention des Nations Unies sur les contrats de vente internationale de marchandises du 11 avril 1980
[30]Arrangement de Madrid concernant l’enregistrement international des marques
B. Peripheral legal data
Competition law
Competition law is governed by Part IV of the Trade Practices Act 1974, consolidated in 2010 by the Competition and Consumer Act 2010 mentioned earlier.
The authority responsible for monitoring compliance with the Act is the Australian Competition and Consumers Commission (ACCC), which has a broad remit that includes consumer protection, competition law enforcement and merger control.
The ACCC has the power to take action before the Federal Court, e.g., for injunctive relief and to order the perpetrators of anti-competitive practices to pay fines and damages to third parties.
European competition law and Australian competition law prohibit anti-competitive practices only when they aim or have the effect of materially affecting competition.
Similarly, it is possible to obtain a waiver from the ACCC, which has the power to authorize an anti-competitive practice in advance or subsequently, if the outcome is beneficial for the public.
Anti-competitive practices prohibited in principle by Australian competition law include the following:
- most price agreements, in particular minimum prices, although recommended prices are tolerated;
- exclusive supply;
- territorial exclusivity;
The ACCC also monitors "Unconscionable Conduct", a concept which covers the abuse of a weaker party by a stronger party, in both commercial and consumer matters.
Personal data
Data protection and privacy are governed by the Privacy Act 1988[30].
The national data protection authority and regulator for privacy and freedom of information is the Office of the Australian Information Commissioner[31]. This authority is recognized by the Global Privacy Assembly.
Where several laws are likely to apply at the same time, Section 3 of the Privacy Act 1988 states that the application of a foreign law relating to the protection of personal data remains unaffected.
The Privacy Act 1988 incorporates the 13 Australian privacy principles[32]: open and transparent management of personal information; anonymity and pseudonymity; collection of solicited personal information (collection of information strictly necessary for the functions or activities of the business); handling of unsolicited personal information; notification of collection of personal information; data for direct marketing purposes; cross-border disclosure of personal information; adoption, use or disclosure of government identifiers; quality of personal information; security of personal information; correction of personal information.
No adequacy decision exists between the European Union and Australia[33]. Consequently, European Economic Area countries must oversee the transfer of personal data to Australia by adopting the European Commission's standard contractual clauses or binding corporate rules setting out a data protection policy.
Australia is a federal state. The federal states may have special provisions that need to be taken into account. For example, some States provide special protection for small traders.
Special features
It is possible for a foreign franchisor to own a 100% subsidiary in Australia.
When a foreigner wishes to buy a company in Australia, the Foreign Investment Review Board, an agency attached to the Department of the Treasury, must give its approval[34] .
However, at least one of the directors must be Australian. This position involves considerable powers over the day-to-day running of the company, which means that such a director must be chosen with care.
In addition, the investment may be subject to prior authorization by the Government, depending on the sector of activity (media, banking, real estate, etc.) and the amount of the planned investment.
Finally, Australia has signed 22 Bilateral Investment Treaties, the purpose of which is to promote investment between nationals of the two States party to the Treaty. Australia has signed Treaties with Argentina, Chile, China, Czechoslovakia, Egypt, Hong Kong, Hungary, India, Indonesia, Laos, Lithuania, Mexico, Pakistan, Papua New Guinea, Peru, the Philippines, Poland, Romania, Sri Lanka, Turkey, Uruguay and Vietnam. All bilateral Treaties between Australia and these countries refer to the International Centre for Settlement of Investment Disputes (ICSID), with the exception of the bilateral investment Treaty between Australia and Hong Kong.[35]
Special provisions for foreign investments
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Intellectual property: https://www.ipaustralia.gov.au/;
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Franchising Council of Australia: www.franchise.org.au;
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Personal data: https://www.oaic.gov.au/;
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Foreign investment: https://foreigninvestment.gov.au/;
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Legislation: https://www.legislation.gov.au/;
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Australian Bureau of Statistics: https://www.abs.gov.au/;
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World Bank: https://www.banquemondiale.org/fr/home;
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International Monetary Fund: https://www.imf.org/fr/Home;
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The International Centre for Settlement of Investment Disputes: https://icsid.worldbank.org/fr.
Main websites
[31] N°119,1988, Compilation N°97
[32] GPO Box 5218, Sydney NSW 2001
[33] Source : Australian Government
[34] Source : CNIL
[35] Source : Australian Government
[36] Source : CIRDI