Franchisor (Jim's Group – Dog Wash Division) To Pay Au$24,420 In Penalties
The ACCC reported today it issued two infringement notices to be paid by Jim's Group Pty Ltd (in its capacity as franchisor of the Jim's Dog Wash franchise).
The notices were for:
Understating the number of former franchisees and failing to provide contact details of former franchisees (in accordance with the requirement to do so in the disclosure document issued under the Franchising Code); and
Discouraging franchisees from exercising their cooling off rights by making a false or misleading representation regarding a franchisees right to cool off.
ACCC quotes from its release regarding the matter, made by ACCC Deputy Chair Mick Keogh:
"Under the Franchising Code, franchisors must provide prospective franchisees with a compliant disclosure document which provides specified information which is important to prospective franchisees".
"At this time of year, most franchisors must update their disclosure documents, so this action by the ACCC serves as a timely warning to all franchisors about the importance of ensuring these documents are compliant with the Franchising Code".
"The ACCC will not hesitate to take enforcement action against franchisors who are failing to meet their obligations under the Code or are misleading prospective franchisees about their rights under the Code."
It is important to note that the ACCC can issue an infringement notice when it has reasonable grounds to believe a person or business has contravened certain consumer protection provisions in the Australian Consumer Law. Jim's Group Pty Ltd paying a penalty specified in an infringement notice is not an admission of a contravention of the Australian Consumer Law.
Please feel free to contact our office with any concerns regarding:
Franchising Code compliance generally, and specifically disclosure document content;
Advice on cooling off rights - cooling off rights were significantly changed in July 2021 and, while they do not arise often, it is important that they are dealt with correctly when they do arise.