Franchising | ACCC

RFG to pay certain franchisees as ACCC settles legal action

The ACCC has accepted a court-enforceable undertaking from Retail Food Group Ltd (ASX: RFG) in which RFG, the operator of many well-known franchising brands, has agreed to make payments to and waive historical debts of a number of affected current and former franchisees, in relation to the purchase of certain corporate stores by these franchisees.

RFG will also pay $5 million to franchisees of Michel Patisserie stores who paid levies into that franchise’s marketing fund between 1 July 2012 and 30 June 2017.

Jim's Group pays penalties for alleged breach of Franchising Code and the Australian Consumer Law

Jim’s Group Pty Ltd has paid $24,420 in penalties in its capacity as franchisor of the Jim’s Dog Wash franchise after the ACCC issued it with two infringement notices for an alleged contravention of the Franchising Code of Conduct, and an alleged contravention of the Australian Consumer Law (ACL).

ACCC alleges Ultra Tune in contempt of court

The ACCC has instituted contempt of court proceedings against Ultra Tune Australia Pty Ltd (Ultra Tune) for allegedly breaching court orders which restrained Ultra Tune from contravening parts of the Franchising Code of Conduct (Franchising Code) and for allegedly failing to comply with the requirements of a court-ordered compliance program.

Key facts sheet for a franchise

Reading the key facts sheet alongside the disclosure document can help potential franchisees to better understand information in the disclosure document.

Franchise disclosure document

All franchisors have to create and maintain a disclosure document that must be given to potential and current franchisees.

The franchise agreement

The franchise agreement is a legally binding contract. It sets out the rules of the franchising relationship that have been agreed to.

The information statement for prospective franchisees

The information statement is a 4-page guide. It highlights issues to think about before becoming a franchisee. The franchisor must give the statement to anyone interested in buying the franchise, within a specific time period.

Franchising supply arrangements and restrictions

Supply arrangements are when a franchisor controls who a franchisee can get their supplies from, what they can sell, or who they can sell to.

Costs that a franchisor can't pass on

Franchisors will ask franchisees to pay for lots of different costs. Under the Franchising Code of Conduct, there are some costs that franchisors can’t ask franchisees to pay for and some circumstances where costs can't be passed on.

Terminating a franchise agreement after receiving lease information

Leases and occupancy licences can be a big expense. In some situations, a franchisee can end a franchise agreement after receiving lease information.

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