The Australian Competition and Consumer Commission has instituted legal proceedings against fertilizer manufacturer Archem Australia Pty Ltd, alleging misleading or deceptive conduct in relation to representations made in connection with the sale of domestic fertilizer spray franchises in Queensland.
The ACCC also instituted proceedings against a related company, Maintenance Franchise Services Pty Ltd, and director Mr Gregory Bath.
Archem manufactures and supplies chemicals and fertiliser products to businesses throughout Australia. It is alleged that Maintenance Franchise Services was the franchisor for the domestic fertilizer spray services which sprayed Archem fertiliser.
The ACCC alleges that Archem and Maintenance Franchise Services contravened section 52 of the Trade Practices Act 1974 by representing without reasonable grounds:
- that franchisees could earn high incomes from repeat business and operate profitably without engaging in selling activities
- that Archem had existing customers for the franchise services
- that Archem had successfully conducted a business of the type offered to franchisees, and
- that Archem products to be supplied to franchisees performed satisfactorily in all the areas where the Archem franchises were offered for sale.
The ACCC has also alleged that Mr Bath was knowingly concerned in, or party to, the alleged contraventions by Archem and Maintenance Franchise Services.
The ACCC is seeking injunctions, declarations, compliance programs for the companies, compliance training for Mr Bath, findings of fact and costs.
The matter has been listed for a directions hearing in the Federal Court, Brisbane, on Friday, 11 February 2005.