Delicia Franchising Pty Ltd

The Australian Competition and Consumer Commission (ACCC) has accepted a court enforceable undertaking from Delicia Franchising Pty Ltd (Delicia Franchising) in relation to its failure to comply with the requirements for preparing and providing financial statements for marketing funds administered by it under the Competition and Consumer (Industry Codes – Franchising) Regulations 2014 (Franchising Code).

Delicia Franchising is the franchisor of the ‘Delicia Acai + Protein Bar’ franchise system. The business operated under the franchise is a health food and beverages bar.

In response to the ACCC’s investigation, Delicia Franchising has admitted that it failed to comply with its obligations under the Franchising Code by:

• failing to prepare marketing fund annual financial statements for the financial years ended 30 June 2020, 30 June 2021 and 30 June 2022 that included sufficient detail of all the fund’s receipts and expenses, in contravention of clause 15(2) of the Franchising Code; and
• failing to provide a copy of the marketing fund annual financial statement to franchisees within 30 days of the statements being prepared for the financial years ended 30 June 2020, 30 June 2021 and 30 June 2022, in contravention of clause 15(4) of the Franchising Code.

Delicia Franchising has admitted that this conduct contravened section 51ACB of the Competition and Consumer Act 2010 (CCA), which prohibits contraventions of industry codes, including the Franchising Code.

To address the issues outlined above, Delicia Franchising provided the ACCC with a section 87B undertaking that it will:

• prepare annual marketing fund financial statements containing sufficient detail and provide them to franchisees in line with the requirements of the Franchising Code, and comply with the various other marketing fund obligations set out in the Franchising Code where relevant;
• issue a corrective notice to current franchisees informing them of the ACCC's investigation and the commitments made in the undertaking; and
• implement and maintain a compliance program for a period of 3 years, which includes training in the Franchising Code.

Delicia Franchising has also paid one Infringement Notice penalty of $11,100 issued by the ACCC under section 51ACD of the CCA in respect of its failure provide a copy of the 2022 marketing fund annual financial statement to franchisees within 30 days of the statement being prepared.