The Australian Competition and Consumer Commission today warned franchisors that business disclosure documents sought by intending and existing franchisees had to be provided within 14 days of the request.
Disclosure documents detailing business information are a significant feature of the Franchising Code of Conduct (Clause 19) which commenced full and mandatory application to franchising operations on 1 October.
The ACCC administers the Code of Conduct that is aimed at redressing the balance of power and information between franchisors and franchisees. The Code is a central element of the Federal Government's small business reform package. Franchisors will need to prepare a disclosure document in terms prescribed by the Code of Conduct.
The ACCC considers that extended delay, avoidance of disclosure or inadequate disclosure by a franchisor following a request by an existing franchisee may contribute to a potential case of unconscionable conduct under the new Section 51(AC) of the Trade Practices Act 1974.
Breaches of the Code and Section 51(AC) may result in compensation, damages, corrective advertising and amendments to contracts.
The ACCC emphasises that it is the franchisor's responsibility to prepare a disclosure document, irrespective of assistance sought from business advisers such as lawyers or accountants.
A Code Compliance Manual, which assists preparation of a disclosure document, is available at $130 from ACCC offices or by calling (02) 6243 1143.
Disclosure documents detailing business information are a significant feature of the Franchising Code of Conduct (Clause 19) which commenced full and mandatory application to franchising operations on 1 October.
The ACCC administers the Code of Conduct that is aimed at redressing the balance of power and information between franchisors and franchisees. The Code is a central element of the Federal Government's small business reform package. Franchisors will need to prepare a disclosure document in terms prescribed by the Code of Conduct.
The ACCC considers that extended delay, avoidance of disclosure or inadequate disclosure by a franchisor following a request by an existing franchisee may contribute to a potential case of unconscionable conduct under the new Section 51(AC) of the Trade Practices Act 1974.
Breaches of the Code and Section 51(AC) may result in compensation, damages, corrective advertising and amendments to contracts.
The ACCC emphasises that it is the franchisor's responsibility to prepare a disclosure document, irrespective of assistance sought from business advisers such as lawyers or accountants.
A Code Compliance Manual, which assists preparation of a disclosure document, is available at $130 from ACCC offices or by calling (02) 6243 1143.