The regulations and the code identify a defined set of persons who will be subject to the code’s procedural obligations and potential civil penalty exposure. Regulation 4(b) is the primary instrument of inclusion: franchisors, franchisees, associates of franchisors, persons conducting a business connected to either franchisor or franchisee for a purpose relating to a franchise agreement, and persons who supply goods or services to franchisees or franchisors in connection with a franchise agreement are “taken to be participants in the franchising industry” for Part 3A (reg 4(b)(i)-(vi)). Schedule 1 cl 3 restates and slightly expands how the code applies: it expressly covers (a) disputes between a franchisor (or an associate of a franchisor) and a franchisee arising under a franchising agreement to which they are parties, and (b) disputes between a participant and another participant or a person to whom goods or services are or may be supplied by the participant, where the dispute relates to acquisition/supply of goods or services for a purpose connected to the business carried on under a franchise agreement (Schedule 1 cl 3).
Who pays. The regulations allocate monetary burdens to participants in at least two ways. First, where an authorised officer arranges mediation with the parties’ agreement, each party must pay $195 for each day, or part of a day, on which the mediation occurs (reg 7(1)). That fee is recoverable as a debt to the Crown (reg 7(2)). The Commissioner retains discretion to waive a mediation fee in particular cases (reg 7(3)). Second, where an authorised officer appoints an expert adviser to assist the officer, the parties are equally liable for the costs of that expert unless they agree a different apportionment (Schedule 1 cl 4(8)).
Who decides. The Small Business Commissioner is explicitly assigned responsibility for administering the code and associated Part 3A functions (reg 5(2)). Operational decisions are delegated to authorised officers acting under the Commissioner’s administration; authorised officers decide whether an applicant has made a reasonable attempt to resolve a dispute and whether the subject matter is frivolous or vexatious (Schedule 1 cl 4(1)), whether to commence ADR, whether to refer to mediation, whether to appoint an expert after consulting the parties (cl 4(7)), and whether to suspend or terminate ADR in specified circumstances (cl 4(9)-(10)). The Commissioner also has fee-waiver authority for mediation fees (reg 7(3)).
Who may be required to participate. Once an authorised officer commences ADR under the code, a party to the dispute or another person authorised in writing to attend or participate on the party’s behalf “must attend or otherwise participate” as required (Schedule 1 cl 4(2)). The authorised officer may request that a participant send a person authorised to resolve the dispute (cl 4(5)), and requests must be complied with “as soon as reasonably practicable” and, if written, within 14 days or longer if allowed by the authorised officer (cl 4(6)).
Who faces enforcement risk. Regulation 6(1) anchors civil penalty exposure to contraventions of s 28E of the Act that are constituted by contraventions of the code. The regulation does not itself set out the elements of s 28E, but it makes clear that where a breach of the code amounts to a breach of s 28E, the civil penalty provisions in Part 7 Division 3A apply. Regulation 6(2) specifies expiation fees that apply to alleged civil penalty contraventions involving alleged contraventions or attempted contraventions of the code: $4,000 for bodies corporate; $500 for natural persons.
Other affected persons. The code’s scope reaches beyond franchise agreements narrowly defined between franchisor and franchisee. Persons who supply goods or services to franchisees or franchisors in connection with a franchise agreement can fall within the definition of participant (reg 4(b)(vi) and Schedule 1 cl 3(b)). That means suppliers in the franchise supply chain who have disputes connected to the franchise business may be drawn into ADR under the code.
Who is outside. The code excludes arbitration from its definition of alternative dispute resolution procedure (Schedule 1 cl 2). The authorised officer may suspend ADR if the dispute is the subject of arbitration, another ADR or court/tribunal proceedings (cl 4(9)). This leaves parties free to pursue arbitration as a separate route, but if arbitration is commenced the administrative ADR under this code may be suspended.
In short, the instrument affects franchisors, franchisees and connected businesses and suppliers: it imposes participation duties once an authorised officer starts ADR, allocates costs for mediation and expert assistance, creates civil-penalty exposure where code breaches equate to s 28E breaches, and places operational control with the Small Business Commissioner and authorised officers.