Surcharge Bans, Workplace Friction, and Growing Pressure on Small Business Operations
This week’s developments highlight a challenging operating environment for franchise networks on multiple fronts. Proposed card surcharge bans threaten to impose hidden costs on merchants, while workforce issues from burnout to AI displacement demand careful management. For franchisors and franchisees alike, these pressures underscore the importance of proactive compliance planning and realistic cost modelling across the network.
- Card surcharge ban risks leaving small businesses worse off
- Could the ban on card surcharges lead to a rise in tax evasion?
- Japanese top chef sacked after drinking on the job wins $11k payout
- Queensland premier claims small businesses ‘under siege’ from government
- More than one-third of Australian workers experience burnout, report finds
- New ACTU president warns AI is automating entire jobs
Card surcharge ban risks leaving small businesses worse off
Small business owners warn that the proposed ban on card surcharges shifts payment processing costs onto merchants rather than eliminating them.
Franchise networks process high volumes of card transactions, so absorbing surcharge costs could meaningfully eat into unit level margins across an entire system. Franchisors may need to revisit pricing structures, point of sale configurations and franchise agreement clauses dealing with approved payment methods. The reform, which flows from the RBA review, could also trigger renegotiation of merchant service agreements that franchisors hold on behalf of franchisees.
Could the ban on card surcharges lead to a rise in tax evasion?
European evidence suggests that higher card payment adoption creates a transaction trail that deters tax evasion, raising concerns that discouraging card use could have the opposite effect.
Franchise systems depend on transparent, auditable revenue reporting to calculate royalties and marketing fund contributions. If the surcharge ban pushes some operators or customers back toward cash, franchisors face greater difficulty verifying franchisee turnover. This reinforces the importance of robust point of sale reporting obligations in franchise agreements and compliance with Franchising Code disclosure requirements.
Japanese top chef sacked after drinking on the job wins $11k payout
The Fair Work Commission ruled that a high end Sydney restaurant’s dismissal of a chef for drinking on the job was harsh, unjust and unreasonable, awarding an $11,000 payout.
This decision is a reminder that even clear workplace misconduct will not guarantee a valid dismissal if procedural fairness requirements are not met. Franchisors operating food service brands should make sure their operations manuals and franchisee training cover proper disciplinary processes. A wrongful dismissal finding can expose both the employing franchisee and, in some structures, the franchisor to reputational and financial risk.
Queensland premier claims small businesses ‘under siege’ from government
Queensland’s Premier has criticised federal regulatory and policy decisions as making it increasingly difficult for small businesses to keep operating.
Franchise networks with a significant Queensland footprint should keep an eye on any state level policy responses that may follow, including potential red tape reduction or regulatory relief measures. Cumulative compliance burdens from multiple levels of government affect franchisee viability, which in turn influences system growth, renewals and the accuracy of earnings information franchisors must disclose under the Franchising Code.
More than one-third of Australian workers experience burnout, report finds
A new report finds that over a third of Australian workers are experiencing burnout, driven not by complex work but by systemic workplace friction.
Franchise systems that rely heavily on front line staff, particularly in hospitality and retail, face heightened retention and productivity risks from widespread burnout. Under work health and safety obligations, franchisees must manage psychosocial hazards, and franchisors who exert operational control may share those duties. Addressing burnout through better rostering, training and support can reduce turnover costs and protect brand standards across the network.
New ACTU president warns AI is automating entire jobs
The newly elected ACTU president has called for stronger regulation of AI in the workplace, warning that businesses are falling short of their obligations as AI automates whole roles.
Franchise systems increasingly use AI for ordering, customer service and back office functions, making them potential targets of any new regulatory requirements the union movement pushes for. Franchisors directing the rollout of AI tools across their networks should consider consultation obligations under enterprise agreements and modern awards. Changes to workforce composition driven by AI may also require updates to franchise disclosure documents where staffing models form part of the franchise offering.
Key Takeaways
- The proposed card surcharge ban may not eliminate payment processing costs but simply shift them to merchants, making it critical for franchise networks to model the true impact on unit economics.
- European research linking card payment adoption to reduced tax evasion suggests that policy changes discouraging card use could carry unintended compliance and reputational risks for cash-intensive franchise sectors.
- The Fair Work Commission’s finding that dismissing a chef for drinking on the job was harsh, unjust and unreasonable reinforces that franchisors must ensure termination processes are procedurally fair, even where the misconduct appears clear-cut.
- With over a third of Australian workers reporting burnout driven by systemic workplace friction rather than task complexity, franchise operators should review rostering, communication, and operational processes as potential contributors.
- The ACTU’s warning on AI automating entire roles signals that regulatory intervention is likely, and franchise networks adopting AI-driven efficiencies should prepare for increased scrutiny of consultation and redeployment obligations.
Minerva Law has acted for franchisors and franchisees across the full franchise lifecycle since 2013. Its Principal, Tsungai Mukushi, has practised as a franchise lawyer since 2008.
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