The Australian Competition and Consumer Commission has taken more aggressive action against rogue franchisors in recent months. This is something we haven’t really seen from the regulator in the past.
In an announcement made earlier this month, the ACCC issued a special warning to food franchisors who will be targeted in the next round of Franchising Code compliance checks.
Under the Franchising Code, franchisors must disclose certain information such as certain set up and operating costs, information about supply restrictions and site or territory history.
This information is given to prospective franchisees to assist them in making a reasonably informed decision …
As spring is upon us once again, now is the time to review your Disclosure Document as well as your: franchise systems, procedures and documentation.
The following sections of the Disclosure will need your particular attention:
List of current franchisees in clauses 6.1 to 6.3
Numbers of any transfers, terminations, or non-renewals in clause 6.4. Note that you will need to delete the 2015 column and add a 2018 column so that you have FY15, FY16 and FY17 data
Contact details of any franchisees in relation to the above events, in clause 6.5
please review the payments listed in clause 14 …
Franchising is one of the most cost-effective ways to expand a business while still maintaining good returns from it. However, before jumping in, you must take a few factors into consideration before setting up a franchise. In Australia, franchises are regulated by the Australian Consumer and Competition Commission (ACCC) under the Code, the Franchising Code of Conduct.
Before franchising, you must consider the advantages of franchising your business and if the business structure is suitable to franchise. Testing out a franchise system with a few initial outlets before you recruit franchisees and conducting a feasibility assessment are …
Ireland v Subway Systems Australia Pty Ltd & Anor (Retail Tenancies)  VCAT 1061 (20 July 2012)
The franchisee (Ireland) and the franchisor (Subway) disputed whether a lease or a licence existed between them. Subway held the Head Lease and attempted to grant a licence to the franchisee to use the premises to operate the Subway franchise. This is a very common set up for many franchise systems in Australia.
The parties were referred to as licensee and licensor in the Agreement. The Victorian Civil and Administrative Tribunal (‘VCAT’) reaffirmed the established legal principle that ‘labelling’ an agreement as a licence is …
The plaintiff in Far Horizons Pty Ltd v McDonald’s Australia Ltd  VSC 310 (18 August 2000) operated two McDonald’s restaurants. The franchisee’s relationship with the franchisor deteriorated over a number of years. Correspondence from the franchisor evidenced this and suggested that the franchisor ‘felt uneasy about growing…’ with the franchisee. The franchisor commenced to develop a new store close to the franchisee’s existing restaurant without first offering the site to the franchisee.
The Court acknowledged the decision in Renard Constructions v Minister for Public Works (1992) 26 NSWLR 234 that there exists implied in every franchise agreement a mutual …