MPs Demand Action on Franchise Abuses

The UK government must eliminate "unsustainable" gaps in franchise business oversight, a parliamentary committee has concluded. The business and trade committee's report on small business strategy addresses a series of scandals that have affected the sector. These include allegations of financial disaster leading to the death of a former Vodafone franchisee and claims of widespread sexual harassment at McDonald's restaurants.

The committee highlighted the imbalance of power in franchise agreements and inadequate franchisor oversight of franchisee employment practices. "Gaps in the oversight of franchise agreements allow serious employment abuses to go unaddressed," the report stated, calling the current situation "no longer sustainable."

Legislative changes are recommended, such as introducing a statutory code of conduct with stronger independent enforcement. The report also noted broader pressures on small businesses, including daily store closures, substantial unpaid invoices totaling £112 billion by the end of 2024, and increased costs from recent budgets.

Recommendations also cover replacing business rates with a fairer system and implementing enforceable measures to end the late payment crisis. Committee chair Liam Byrne described the situation as stark, with many small businesses facing unprecedented pressures without adequate support, posing a real risk to the economy.