ACCC Update David Salisbury GM Consumer & Small Business - PowerPoint PPT Presentation

ACCC Update David Salisbury GM – Consumer & Small Business Strategies National Franchise Convention Legal Symposium 11 October 2015

The ACCC • Independent statutory body • Promotes compliance with CCA (including Franchising Code) • Franchising Code is an enforcement priority in 2015 8 October 2015 Conference 3

Franchising Code • New Code from 1 January 2015 • Key changes: – Obligation to act in good faith – Financial penalties & infringement notices – Greater marketing fund disclosure 8 October 2015 Conference 4

The Code – ACCC role • Provide guidance • Investigate breaches • Take enforcement action • 2015: more than 750 franchising ‘contacts’ 8 October 2015 Conference 5

Complaints • Misleading conduct • Unconscionable conduct • Failure to comply with disclosure requirements • Contract disputes • Good faith 8 October 2015 Conference 6

Compliance checks (“audits”) • 13 audits this year / 75 since 2011 • Can compel a franchisor to provide documents • Found most franchisors are compliant with Code • Next round of audits after 31 October 2015 8 October 2015 Conference 7

Enforcement action • Coverall • Sensaslim 8 October 2015 Conference 8

Penalties & infringement notices • 10 months since introduction of new Code • Have not taken court proceedings or issued IN • Currently investigating potential Code breaches 8 October 2015 Conference 9

Education activities • Goal is to achieve compliance with Code • Providing guidance on the new Code • Free online education program for prospective franchisees 8 October 2015 Conference 10

Franchising Consultative Committee • Includes franchisors, franchisees, lawyers, researchers • Discusses issues affecting the franchising sector • Later this year – membership review 8 October 2015 Conference 11

Unfair contract terms • Will apply to many franchise agreements • Standard form contracts • Businesses with less than 20 employees • Contracts valued under $300,000 / $1 million (multi year) 8 October 2015 Conference 12

Unfair contract terms (cont.) • When will a term be unfair? – Causes significant imbalance – Not reasonably necessary to protect interests – Cause detriment to franchisee if relied upon 8 October 2015 Conference 13

Unfair contract terms (cont.) • 12 month transition period • ACCC will work with sector during this period • Seeking voluntary changes to unfair terms • Start thinking about terms in FAs now 8 October 2015 Conference 14

International approaches • ACCC interest in international regulation of franchise sector • Attended APEC conference 8 October 2015 Conference 15

Further information • Contact the ACCC – 1300 302 021 – www.accc.gov.au/franchising • Publications – Franchisor compliance manual – Franchisee manual – www.accc.gov.au/publications • ACCC Franchising Information Network – www.accc.gov.au/media/subscriptions 8 October 2015 Conference 16