Franchising

ACCC alleges RFG engaged in unconscionable and misleading conduct

The ACCC has commenced proceedings in the Federal Court against Retail Food Group Limited (ASX: RFG) and five of its related entities (Retail Food Group), alleging the food and beverage franchise company engaged in unconscionable conduct and made false or misleading representations in its dealings with franchisees, in breach of the Australian Consumer Law.

Retail Food Group manages and operates a number of franchises, including Michel’s Patisserie, Brumby’s Bakery, Donut King and Gloria Jean’s Coffee.

Class exemption will enable small businesses to collectively bargain

An ACCC class exemption due to commence in early 2021 will allow small businesses, franchisees and fuel retailers to collectively negotiate with their suppliers and processors, franchisor or fuel wholesaler respectively, without first having to seek ACCC approval.

Businesses will be able to use the class exemption after the period for parliamentary disallowance expires in early 2021. This collective bargaining exemption is the first class exemption to be introduced by the ACCC.

Back In Motion Physiotherapy to remove alleged unfair contract terms for franchisees

The ACCC has accepted a court-enforceable undertaking by Back In Motion Physiotherapy Pty Ltd to remove certain terms from its franchisees agreements which it admits may be unfair.

Under a restraint of trade clause contained in most of the Back In Motion Physiotherapy franchise agreements, any franchisee who wanted to leave the group was not allowed to be involved in any competing practice located within a radius of up to 10 kilometres of a Back In Motion Physiotherapy franchise for up to 12 months.

Small business in focus - 1 January to 30 June 2020

This twice-yearly report provides a summary of ACCC activities in the small business, franchising and agriculture sectors.

Megasave Couriers and Gary Bourne allegedly misled franchisees

The ACCC has instituted proceedings against franchisor Megasave Couriers Australia Pty Ltd (Megasave) in the Federal Court, alleging that it misled prospective franchisees with false or misleading promises of guaranteed minimum weekly payments and annual income if they purchased a Megasave courier franchise.

It is also alleged that Megasave’s sole director, Mr Gary Bourne, was knowingly involved in the conduct.

The ACCC alleges that:

Holden commits to negotiate in good faith with Holden dealers

General Motors Holden Australia NSC Pty Ltd (Holden) has committed to negotiate with its dealers in good faith about compensation for Holden’s withdrawal from the Australian market, as required under the Franchising Code of Conduct and Australian Consumer Law.

The commitment follows pressure from the ACCC for Holden to agree to extend the deadline for acceptance of its compensation offer and to engage in good faith negotiations with dealers. 

The ACCC said it was preparing for court action had Holden not changed its position. 

Bob Jane gives undertaking in relation to franchise agreements

Bob Jane Corporation Pty Ltd (Bob Jane) has given the ACCC a court-enforceable undertaking to comply with its obligations under the Franchising Code of Conduct in relation to renewal and extension of franchising agreements.

The ACCC was concerned that Bob Jane failed to comply with its obligations under the Code relating to end of term and renewal of agreements. In particular, Bob Jane failed to notify some franchisees whether it intended to renew or extend their franchise agreements at least six months before the expiry of their agreements.

7-Eleven and franchisees authorised to co-operate on store opening times

7-Eleven and its franchisees have been granted conditional interim authorisation to discuss potential temporary store closures or reduced trading hours in light of reduced customer demand because of COVID-19 restrictions.

7-Eleven owns and operates stores in competition with its franchisees in some areas and therefore discussions and agreements between them risk breaching the competition laws.

False and misleading conduct key issue for small businesses

Reports to the ACCC by small businesses about false and misleading conduct by other businesses including suppliers increased by eight per cent, totalling more than 900, in the six months to 31 December 2019.

This issue continues to be the Australian Consumer Law issue most commonly affecting small businesses, and accounts for over a third of small business reports made to the ACCC, according to the latest Small Business in Focus Report, published today.

Small business in focus - 1 July to 31 December 2019

This twice-yearly report provides a summary of ACCC activities in the small business, franchising and agriculture sectors.