ACCC to audit take-away food and fitness franchisors

The Australian Competition and Consumer Commission has announced plans to use its audit power to investigate whether franchisors in the take-away food and fitness industries are complying with the Franchising Code of Conduct.

The Australian Competition and Consumer Commission has announced plans to use its audit power to investigate whether franchisors in the take-away food and fitness industries are complying with the Franchising Code of Conduct.

The industry code audit power enables the ACCC to compel a trader to provide information or documents which it is required to keep, generate or publish under a prescribed code. For franchisors, this includes disclosure documents, marketing fund statements and franchise agreements. 

Addressing the Legal Symposium at the National Franchise Convention last weekend, ACCC Deputy Chairman Michael Schaper said the audit power will be used to target industries that are generating a disproportionate number of complaints. 

While the consumer watchdog will be shining its light on franchisors from the take-away food and health and fitness industries, Schaper says audits won’t be restricted to these two sectors. Since the audit power was introduced in 2011, the ACCC has audited around 50 franchisors, with most found to be compliant with the requirements under the Code. 

“The ACCC has actively enforced the Franchising Code since its introduction in 1998,” Schaper 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 further updates in the franchising sector, Schaper reported that more than 5,000 people have enrolled in the ACCC funded franchise pre-entry education program run by Queensland’s Griffith University. And the ACCC will soon be calling for expressions of interest for membership of its Franchising Consultative Committee.

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