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ACCC Franchising Update

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By Marianne Marchesi, Associate, MST Lawyers

Dr Michael Schaper, Deputy Chair of the Australian Competition and Consumer Commission (“the ACCC”), addressed the National Franchise Convention Legal Symposium on Sunday 26 October 2014 about the ACCC’s recent franchising activities.

Dr Schaper’s key points were:

  • new powers are to be given to the ACCC to issue infringement notices of up to $8,500 and to take court action seeking penalties of up to $51,000 for breaches of the Franchising Code of Conduct (“the Code”). This will give the ACCC more teeth and allow it to quickly deal with breaches whether by a franchisor or franchisee
  • it is not only franchisors who need to ensure compliance with relevant laws. The ACCC recently took action against a number of Harvey Norman franchisees for making misleading representations to their customers
  • the ACCC has supported the free online pre-entry education program run by Griffith University since 2010 which has proven to be successful in educating franchisees
  • the ACCC received 591 franchising complaints and 227 enquiries in the 2013/2014 financial year
  • last year, the ACCC announced that it would be auditing franchisors in the fast food and fitness industries. Dr Schaper confirmed that the ACCC had audited six fast food franchisors and six fitness franchisors and that all traders were largely compliant with only some minor issues being identified
  • the ACCC will be updating its franchising web page and releasing new guidance materials, including updating the franchisor and franchisee manuals, in relation to the new Code

The ACCC will be holding a free interactive webinar on the new Code on Tuesday 9 December. To register, go to www.webcasts.com.au/accc091214