In one of the most important decisions affecting franchising in Australia, we examine how the Federal Court determined the number of contraventions and calculated the penalty of $2,604,000 imposed on Ultra Tune. MST Lawyers Principal, Philip Colman, steps through the key points in the decision handed down by Justice Bromwich.
In media release of 7 February 2019, the ACCC announced that café, restaurant and take away food services industries will be the target of the ACCC’s next round of Franchising Code compliance checks.
Ultra Tune’s “stubborn”, “cavalier”, and “serious” breaches of the Franchising Code of Conduct (Franchising Code) and Australian Consumer Law (ACL) have resulted in a total fine of $2.604 million.
“Skimping” on the level of detail in marketing fund or cooperative statements provided to franchisees will not be tolerated.
This article reviews this aspect of the decision handed down by Justice Bromwich.
Last week the Federal Court, in a proceeding brought by the ACCC, imposed a $2,604,000 penalty against Ultra Tune for contravening the Code and the ACL. These were the first proceedings brought against a franchisor alleging a breach of the Franchising Code obligation to act in “good faith” in business dealings with franchisees by the ACCC.