Franchising

Franchising, misleading behaviour continues to be an ACCC focus

Nearly 5000 small businesses reported various issues to the ACCC last year, with the most common areas of concern being alleged misleading conduct, consumer guarantees issues and wrongly accepting payments.

The ACCC took seven enforcement actions, including five for alleged breaches of the Franchising Code. It also did 29 compliance checks to ensure adherence with the franchising, horticulture, and food and grocery industry codes.

2018 compliance & enforcement priorities

In his annual CEDA address, Chairman Rod Sims launched the ACCC's 2018 Compliance and Enforcement policy. This year, the ACCC will focus on consumer issues in broadband services and energy, competition in the financial services and commercial construction sectors, systemic consumer guarantee issues, and conduct that may contravene the new misuse of market power and concerted practices provisions.

Pastacup to pay $100,000 for breaches of new Franchising Code

The Federal Court has ordered Pastacup franchisor Morild Pty Ltd (Morild) to pay penalties of $100,000 for breaches of the Franchising Code of Conduct (Franchising Code), following ACCC proceedings. The company’s co-founder and former director, Mr Stuart Bernstein, has also been ordered to pay $50,000 for being knowingly concerned in the breaches.

Mr Bernstein co-founded the Pastacup franchise in 2008 and has managed and been a director of two previous franchisors of the Pastacup franchise system that each became insolvent.

ACCC says Small Businesses just need a level playing field

The Australian Competition and Consumer Commission has taken action over the last six months to ensure small business have a level playing field, as revealed in the 14th edition of the ACCC’s Small Business in Focus report.

“The ACCC is committed to ensuring small businesses receive the protections of the new business-to-business unfair contract terms law, franchising and other industry codes,” ACCC Deputy Chair Dr Michael Schaper said.

Franchising: what you need to know

This is a quick guide to help franchisees and prospective franchisees understand some of their rights and responsibilities under the Franchising Code of Conduct.

ACCC takes action against Geowash car wash franchisor

The Australian Competition and Consumer Commission has applied to the Federal Court for leave to commence proceedings against Geowash Pty Ltd (subject to deed of company arrangement) (Geowash), a former national franchisor that marketed and sold hand car wash franchises between 2013 and 2016. 

The ACCC proceedings will allege that Geowash made false or misleading representations and engaged in unconscionable conduct in breach of the Australian Consumer Law, and also failed to comply with the good faith obligation which is contained in the Franchising Code of Conduct. 

Domino’s pays penalty for alleged Franchising Code breach

Domino’s Pizza Enterprises Ltd (Domino’s) is the first company to pay penalties for alleged non-compliance with the Franchising Code of Conduct.

Following the issue of two infringement notices by the ACCC, Domino’s has paid penalties totalling $18,000. The ACCC issued the infringement notices because it believed that Domino’s had failed to comply with the requirement in the Franchising Code of Conduct to provide franchisees with both an annual marketing fund financial statement and an auditor’s report within the time limits prescribed under the Code.

Businesses remove unfair contract terms before new law

The Australian Competition and Consumer Commission’s new report into potentially unfair contract terms details its review of 46 contracts across seven industries, which resulted in a range of businesses making changes to their small business standard form contracts.

The ACCC will begin enforcing the new law this week [Nov 12], when consumer protections against unfair contract terms are extended to include up to 2 million Australian small businesses.