Lawson's Trading Co. Pty Ltd - s.87B undertaking

Lawson's Trading Co. Pty Ltd (ACN 075 570 259) ("Lawson's Trading") is the manufacturer and distributor of machinery, chemicals, and know-how related to the application of specialised, solvent-free sprayed polyurethane protective coatings known as 'Armour Linings'.

Lawson's Trading carries on business in Australia as the franchisor of a business system involving the application and distribution of "Armour Linings" products and processes.  As part of its franchise operation, Lawson's Trading supplies equipment and services to franchisees, including training, marketing and support.

The Commission is of the view and Lawson's Trading admits that the following conduct, specifically failure by Lawson's Trading to:

• provide Disclosure Documents to franchisees from January 1999 to April 2001;
• ensure, from January 1999 to April 2001 that it had received signed statements from prospective franchisees confirming that they had received advice from an independent legal adviser, business adviser or accountant or had received advice of a similar kind or, alternatively to ensure that it had received a signed statement that the franchisees had declined to obtain such advice; and
• provide a Dispute Resolution Process within its 'Licence Agreements' and 'Supply Agreements' from January 1999 to September 2002

contravenes section 51AD of the Trade Practices Act 1974 ("the Act") and clauses 6(1), 10, 11(1), 11(2), 26, 27, 28 and 29 of the Trade Practices (Industry Codes Franchising) Regulations 1998 ("Franchising Code of Conduct").

Lawson's Trading has entered into an undertaking with the Commission pursuant to section 87B of the Act to address the concerns raised, whereby Lawson’s Trading agrees:

• to cease and desist from engaging in the conduct described above;
• to create an appropriate Disclosure Document and provide it to all franchisees;
• that it has, where appropriate, provided refunds of the purchase price to some franchisees and assisted in organising the resale of franchises for some franchisees;
• to implement a Trade Practices Compliance Program; and
• to ensure that its Director attends a Trade Practices Compliance Seminar.