33. What is ‘churning’?

The ACCC regards churning as the repeated selling of a franchise site by a franchisor for the full market value of a viable concern, where the franchisor would reasonably understand that the site is unlikely to operate successfully regardless of the individual franchisee’s business skills. Churning is more likely to be found where a franchisor does not disclose previous poor performance at a site.

Such conduct may amount to misleading and deceptive conduct or unconscionable conduct. If you suspect churning, you should complain to the ACCC.