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Enforcing the Franchising Code: Recent activities & proposed reforms

Posted on 28 October 2014

Dr Michael Schaper, the Deputy Chair of the ACCC has addressed the National Franchise Convention Legal Symposium.

His presentation can be viewed here -activities-proposed-reforms

Dr Schaper outlined the current cases being pursued by the ACCC against franchisors and also the case brought against 9 Harvey Norman franchisees for false and misleading representations about consumer guarantees.

He outlined that the ACCC has conducted 6 audits of fast food franchisors and 6 audits of fitness franchisors.  Most franchisors have been found to be compliant with their requirements with only minor issues found.

With disclosure documents required to be updated by 31 October, 2014 it is important to note that the minor issues found by the ACCC included:

1. failure to disclose information about past and current franchisees and their contact details;

2. omissions in the disclosure document; and

3. failure to have the marketing fund audited.

If and when the highly anticipated amendments to the Franchising Code of Conduct commence (anticipated to be 1 January, 2015) it is expected the ACCC's audit powers will be greated extended.

Interestingly the ACCC take around 35 cases to court each year.  This process is initiated by a complaint to the ACCC and the ACCC receive approximately 160,000 complaints and enquiries each year.

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