The Australian Competition and Consumer Commission has instituted legal proceedings against Mr Bon Levi, who it alleges has sold various distributorships under the Little Joe and Joey's brands.
The ACCC's action alleges misleading and deceptive conduct and contraventions of the Franchising Code of Conduct in relation to the promotion and sale of the distributorships including those for snack foods, cookies and fruit juices as well as master distributorships for cookies and beverages.
The ACCC alleges that the distributorships in question are, in fact, franchises and that Mr Levi breached section 51AD of the Trade Practices Act 1974 by failing to provide distributors and prospective distributors disclosure documents, and copies of the Franchising Code of Conduct, as the Code requires.
The ACCC also alleges that Mr Levi contravened s 52 of the Act by representing without reasonable grounds:
- that each distributor would receive a guaranteed income of $2,000 per week for a minimum of five years after an initial paid training period
- that each distributor would be provided for the duration of their agreement 75 retail outlets in their delivery area to deliver snack foods products to and
- that, in the case of the snack foods, he would conduct a national advertising campaign by means of television, radio and magazine advertising which would be sufficient to establish "Little Joe Snax" as a substantial competitor to the major snack food brands in Australia.
The ACCC has also instituted proceedings against Mr Craig Cleary, Little Joe Snax's former National Distribution Sales Manager, alleging that he was an accessory to each of the alleged contraventions of Mr Levi that occurred in or after October 2003.
The ACCC is seeking court orders including:
- declarations
- injunctions and
- costs.
The matter has been listed for a directions hearing in the Federal Court, Brisbane, on Wednesday, 1 September 2004.