Cheap As Chips Franchising Pty Ltd - s.87B undertaking

From the mid 1990s, Cheap As Chips Franchising Pty Ltd ("Cheap As Chips") has been a franchisor of mobile general and residential and commercial cleaning services and cleaning agents, equipment and other related products.

Since at least 1997, Cheap As Chips has:

• unilaterally imposed additional and detailed obligations on its franchisees without consultation or negotiation;
• threatened to refuse to allocate work to ("suspend") or terminate the franchise agreements of its franchisees rather than negotiate disputes; and
• suspended and terminated its franchisees rather than negotiate disputes.

The Commission considered that since 1 July 1998, the above conduct of Cheap As Chips contravened sections 51 AC and 51AD and instituted proceedings on 30 June 1999 making such claims. On 14 March 2001, consent orders were proposed and the court made declarations and orders for injunctions, compensation, costs and interest. The Court also noted that Cheap As Chips offered the Commission a section 87B undertaking to implement a trade practices compliance program as part of the resolution of the proceedings by consent.

The focus of the undertaking is that Cheap As Chips will:

• implement a disputes resolution procedure;
• appoint a compliance officer to review disputes, the imposition of new obligations, threats to suspend, threats to terminate, suspensions and terminations and document such reviews; and
• undertake trade practices training.