The ACCC has announced that it will commence a new round of
audits focusing on franchises in the takeaway food and health and
Under section 51ADD of the Competition and Consumer
Act, the ACCC has the power to audit documents required to be
generated under the Franchising Code of Conduct, such as disclosure
documents and marketing fund statements.
The audit power was introduced in 2001 and since then the ACCC
has audited over 50 franchisors.
The new round of audits comes as a response to the ACCC having
received 740 complaints and 114 enquiries about people involved in
franchising in the past year.
The takeaway food and health and fitness industries have been
targeted as they generate a disproportionate number of these
complaints. However, the ACCC has not confined the new audits and
will extend the scope to other industries.
Common issues raised include franchisees frequently not
receiving disclosure documents and disclosure documents not being
up-to-date or not including important information. More than 100
complaints allege false representations and misleading conduct,
many relating to claims made by franchisors about potential
The audits were announced by ACCC deputy chairman, Dr Michael
Schaper, at the National Franchise Convention Legal Symposium.
Dr Schaper also noted that the ACCC had made submissions on the
new Franchising Code of Conduct Review suggesting that the scope of
the audit power be extended to enable the ACCC to more accurately
assess a franchisor's level of compliance with the Code.
The ACCC has also published
a new guide for franchisors and franchisees focusing on
competition issues in franchising supplier arrangements, including
rebates and quality standards.
Click here to read our article on the review of the Franchising
Code of Conduct.
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