The franchisor compliance manual

Breaches of the code

Who is liable for a breach of the Code?

While section 51AD of the Act prohibits businesses from contravening the Code, individuals can also be liable. Individuals’ liability can extend to the directors, the secretary, other officers or the board members of a company. Liability can also extend to employees of the company.

A person may be liable if they:

  • attempt to breach the Code
  • assist, or induce, another party to breach the Code
  • are a party to the breach of the Code
  • are knowingly concerned with a breach of the Code.

What should you do if you have breached the Code?

If you believe you may be in breach of the Code you should:

  • immediately stop the activity
  • seek legal advice on whether you are in breach of the Code
  • provide a remedy to the affected parties
  • review how the breach came about
  • put in place an effective compliance program (including staff training) to avoid future recurrences.