By Aimee Chanthadavong
The Australian Competition and Consumer Commission will be targeting the take-away food and fitness industry to check whether franchisors are complying with the Franchising Code of Conduct.
The industry code enables the ACCC to force franchisors to provide information or documents that are required to keep, generate or publish under a prescribed code. Also, as part of the code, franchisors are required to disclose documents, marketing fund statements and franchise agreements.
Speaking at the Legal Symposium at the National Franchise Convention, ACCC deputy chairman Michael Schaper said the audit power will be used to target industries that are generating a disproportionate number of complaints.
“In the ACCC’s next round of audits we will be looking at franchisors from the take-away food and health and fitness industries, however our audits will not be restricted to these two sectors,” he said.
Since the audit power was introduced in 2011, the ACCC has audited around 50 franchisors. Most franchisors have been compliant with the requirements under the Code.
Schaper went on to explain the ACCC’s wider compliance and enforcement activities in the franchising sector.
“The ACCC has actively enforced the Franchising Code since its introduction in 1998,” he said.
“During this time we have taken successful court action against more than 20 franchisors and have also obtained court enforceable undertakings from more than 10 franchisors.”
“These cases cover unconscionable conduct, misleading and deceptive conduct and contraventions of the Franchising Code.”
In delivering an update on activities, Schaper reported that more than 5,000 people have enrolled in the ACCC funded franchise pre-entry education program run by Griffith University.
Schaper also flagged that the ACCC will soon be calling for expressions of interest for membership of its Franchising Consultative Committee.