While the Code applies to franchise agreements entered into on or after 1 October 1998, certain provisions of the Code will not apply to agreements entered into prior to 1 January 2015 (see table below).
If a franchise agreement is entered into
The following provisions will not apply
Between 1 July 1998 and 29 February 2008
The Code applies to franchise agreements. A ‘franchise agreement’ is an agreement (either written, verbal or
implied) that meets the following conditions:
The Australian Competition and Consumer Commission is helping the franchising sector to understand the new Franchising Code of Conduct ahead of its 1 January 2015 start date.
From 1 January 2015, the current Franchising Code will be repealed and replaced with a new Code which will apply to all franchise systems operating in Australia.
To help franchisors, current and prospective franchisees and their professional advisers to make sense of the new Code, the ACCC will be hosting a free interactive live webinar on 9 December 2014 at 12:00pm.
The Federal Court has declared that South East Melbourne Cleaning Pty Ltd (in liquidation) (formerly Coverall Cleaning Concepts South East Melbourne Pty Ltd) (Coverall Melbourne) engaged in unconscionable conduct in contravention of the Australian Consumer Law following action by the Australian Competition and Consumer Commission.
Coverall Melbourne was the Victorian franchisor of a national franchise system that establishes and operates professional cleaning services.
The game is set to change for operators engaging in serious breaches of the Franchising Code of Conduct with proposed enforcement powers increasing the stakes on 1 January 2015.
Based on the exposure draft of the new Code released in April 2014, the Australian Competition and Consumer Commission will be able to issue infringement notices of up to $8,500 and seek penalties up to $51,000 in the Federal Court for contraventions of the Code.
Deputy Chair Dr Michael Schaper provides an update on the ACCC's recent franchising activities. Dr Schaper also outlines the ACCC's approach to enforcement and discusses proposed changes to Franchising Code of Conduct including possible powers to issue infringement notices and seek penalties in the Federal Court.
Misleading claims are a continuing issue for the small business sector, according to the Australian Competition and Consumer Commission’s latest Small business in focus report launched today by ACCC Deputy Chair Dr Michael Schaper at the COSBOA National Small Business Summit.
This report, the eighth in the series, includes the latest small business and franchising related complaints data, and highlights the ACCC’s work in the small business sector between 1 January and 30 June 2014.