30. Are franchises allowed to fix prices?

Price fixing is prohibited by the Competition and Consumer Act. It occurs when competitors reach an agreement to fix, maintain or control prices. The agreement does not have to be in writing. In some circumstances, franchisees could be regarded as competitors.

Whether an agreement amounts to price fixing will depend on the substance of the agreement, rather than the way the agreement is expressed. It can include agreements purporting to 'recommend' prices or agreements to fix, maintain or control any discount, allowance, rebate or credit in relation to goods or services.