Burnan Pty Ltd (Burnan), trading as Résumé
Service, promotes and supplies a résumé writing
business process. Burnan's business process involves the
preparation of résumés and the marketing and
operation of a résumé writing service as a business
operated from home offices. The business process is sold to various
individuals across Australia for A$22,000.
Burnan advised purchasers of the business process that they
could expect to earn between A$43,000 and A$96,000 per annum using
the business process. These representations were published on
Burnan's website, in newspaper advertisements and in the
documents supplied to prospective operators.
In April 2009, the ACCC brought proceedings in the Perth Federal
Court against both Burnan and its founder/director Keith Rolston
for alleged misleading and deceptive conduct in contravention of
section 52 of the Trade Practices Act 1974 (Cth) relating to the
promotion and sale of résumé writing businesses to
The ACCC alleged that Burnan and Rolston made the
representations regarding the income which could be earnt operating
the business without reasonable grounds.
The Court found that these representations regarding income were
unfounded and misleading as Burnan had no evidence to support his
claim nor to suggest that anyone using the business process had
ever earned income in that range.
The Court ordered that any representations made by Burnan and
Rolston in the future regarding Résumé Service's
expected earnings had to be supported by reasonable grounds.
The potential profitability of a business is a material factor
for those considering whether to purchase a business, particularly
a franchised business. The ACCC's chairman Graeme Samuel
stressed the importance that "those selling and promoting
business opportunities have to make credible and sustainable claims
about the viability and profitability of the business."
Prospective franchisees seeking to work from home or in
vulnerable financial positions rely on the information disclosed by
the franchisor regarding their potential earning capacity, profit
and sales figures. This case reminds franchisors that the ACCC
seeks to protect consumers and any misleading or deceptive claims,
including those regarding the expected profitability of a
franchised business opportunity, that are designed to entice
prospective franchisees to sign on and purchase a business will
expose franchisors to possible court action.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
This newsletter includes links to recent media releases, reports and cases relating to competition and consumer law.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).