Bob Jane Undertaking
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 (Code) in relation to renewal and extension of franchise agreements.
The undertaking requires Bob Jane to:
- not terminate any franchise agreement that is operating on an over holding basis at the commencement date of the undertaking without providing 6 months’ written notice
- give 6 months’ written notice to franchisees of whether Bob Jane intends to renew or extend their franchise agreements under clause 18 of the Code
- provide a copy of the Code, a copy of the disclosure document and a copy of the franchise agreement, in the form in which it is to be executed to those franchisees that Bob Jane intends to renew at least 14 days before the renewal or extension of the franchise agreement as required under clause 9 of the Code
- not enter into, renew or transfer or extend the term or scope of a franchise agreement without first receiving a written statement that the franchisee or prospective franchisee has received, read and had a reasonable opportunity to understand the disclosure document and the Code as required under clause 10 of the Code
- establish and implement a compliance program within 4 months of the commencement date of the undertaking, such program to be in accordance with the requirements set out in Annexure A of the Undertaking
- maintain and continue to implement the Compliance Program for a period of at least 3 years and
- provide, at its own expense, a copy of any documents required by the ACCC as set out in Annexure A of the Undertaking.
For a copy of the Undertaking click on the below link:
The Undertaking came as result of concerns by the ACCC that Bob Jane was not complying with its end of term and renewal obligations under the Code specifically:
- 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 franchise agreements.
- Bod Jane extended the term of certain franchise agreements without first providing the documents required by clause 9 of the Code and did not obtain a written statement from franchisees that they had received, read and had an opportunity to understand certain documentation as required under clause 10 of the Code.
ACCC Deputy Chair Mick Keogh said.
“Ensuring small businesses receive the protections of competition and consumer laws, with a focus on the Franchising Code, is a current compliance and enforcement priority for the ACCC.
Franchisors often have a stronger bargaining position in their dealings with franchisees, and we will continue to investigate and take action against franchisors where we believe there has been a potential breach of the Code.”
The end of term obligations in the Code are not new obligations. The undertaking provided by Bob Jane sends a clear message to franchisors that they must have the systems and processes in place to ensure that franchisees receive the notice required under clause 18 of the Code together with all relevant documents within the time frames specified by the Code.
Our franchising team can assist you with drafting template notices and in establishing appropriate protocols to ensure you are complying with your Code obligations.
If you have any queries please do not hesitate to contact Raynia Theodore in MST Lawyers’ Corporate Advisory and Franchising team or on +613 8540 0242.