The Franchise Council of Australia (FCA) has agreed
to fund the High Court appeal of the landmark Ketchell case by up to $175,000
plus pro-bono legal contributions, with indications that the case may be heard
as early as next month. The FCA has asked members to make voluntary
contributions to the Ketchell case costs, with suggested donation amounts
ranging from $500 to $1,000. The FCA says that the case needs to be heard to
establish clarity for the sector after the New South Wales Court of Appeal
found a franchise agreement to be illegal, where the franchisor (Master Education
Services Pty Ltd) had not received a written statement from the franchisee
(Ketchell) to state that they had received, read, and had reasonable
opportunity to understand the franchisor’s disclosure document and the
Franchising Code of Conduct.Read
more
Seminar spruiker
prosecuted for franchisor’s imaginary representations
Event management company The Triumphant Group has
been prosecuted by the Australian Competition and Consumer Commission (ACCC)
for false and misleading representations in its role as marketing and
promotional agent for a franchisor. Triumphant was the marketing agent for
Imagine Essential Services and its owner Richard Evans, who were both found
recently by the ACCC to have made false and misleading claims about the
profitability of Essential licenses and other aspects of the Essential
business. The ACCC found that Triumphant falsely represented the profitability
of Essential licences, and made false representations about customer numbers,
business relationships and membership of certain professional associations.
The ACCC obtained orders preventing Triumphant from
engaging in similar conduct in future, and to publish certain information about
the proceedings on its website.Read more
WA franchise
inquiry report extended
The final report of the Western Australian
franchise inquiry which was due to be given to WA Small Business Minister
Margaret Quirk at the end of March has been extended by approximately two weeks
and is likely to be presented in the middle of this month.Read
more
Retail Leasing
report presented to government
The Productivity Commission’s inquiry into the
Market for Retail Tenancy Leases in Australia has now concluded. The
final report has been given to the federal government for its consideration and
release within 25 sitting days of Parliament. Read more
Small food
retailers feeling sales hunger pains
The performance gap between large and small
retailers increased most in the food sector according to figures released by
the Australian Bureau of Statistics, indicating that price-sensitivity
following interest rate hikes is driving consumers away from small retailers to
the established grocery chains.Read
more
Resolve franchise disputes – Introduction to Franchising
Learn how to resolve
franchise disputes without litigation.
Phone retailer on
hold for Trade Practices breaches
The ACCC has commenced proceedings against mobile phone
retailer Allphones and several of its key executives for allegedly engaging in
misleading and unconscionable conduct in dealing with its franchisees. The ACCC
alleges that the company misrepresented how it shares profits with franchisees
and operates its franchise system, as well breached various sections of the
Franchising Code of Conduct. The ACCC is seeking injunctions, declarations and
costs on the matter, for which a directions hearing has been set for April 11
in the Federal Court in Sydney.Read more
Court orders
against Duco Magic for misleading representations
Automotive paint touch-up business Duco Magic has
had consent orders made against it in the Federal Court in Brisbane for misrepresenting the income that
could be earned by owners of its business opportunity, and for overstating the
expected customer demand for its services. The proceedings instituted by the
ACCC against Duco Magic (Australia) Pty Ltd and its director Warwick Lindsay, found
that there were no reasonable grounds to support claims that operators could
earn $150,000 per annum, nor that “there was so much demand” for services that
“operators could never satisfy it all”.Read more
How to stop ex-franchisees
destroying your system (free seminar)
From copycat concepts to scathing media coverage
and litigation, ex-franchisees can be a potentially destructive force for
any franchise system. With franchisors now required to disclose contact
details of former franchisees under changes to the Franchising Code of
Conduct, ex-franchisees have more scope than ever to influence the future
success of a franchise brand. Attend this free franchise sector briefing,
presented by Franchising Australia Survey author Professor Lorelle Frazer from
Griffith University and Jason Gehrke from the Franchise Advisory
Centre, and learn:
- Why ex-franchisees engage in destructive
behaviour, and what they hope to achieve;
- Common types of destructive activity, and how to
monitor and minimise it;
- Developing processes to maintain positive brand
engagement among ex-franchisees.
Be the first to hear this new insight into
franchising and how it might apply to your business. This free evening seminar
will be held in Brisbane on May 12, Sydney on May 19, and Melbourne on
May 20. To register your interest in attending, contact Anne Hutton on 07 3382
1187 or email .
Jetset and
Qantas travel businesses to merge
The merger of Qantas Holidays and Qantas Business
Travel with Jetset Travelworld, the franchisor of 665 travel agencies
throughout Australia,
has been cleared to proceed after the ACCC announced it would not oppose the
merger.Read
more
How to find the right sites & territories – April/May seminars
The decision announced by the Franchise Council of
Australia (FCA) to fund the appeal in the High Court of the Ketchell case
should come as no surprise to the franchise sector given the amount of
publicity the issue has received recently.
The FCA’s position is that without a final
determination by the courts, the current precedent established by the Ketchell
case creates vast uncertainty for both frachisors and franchisees. At heart is
the fundamental issue that a technical breach of the Franchising Code of
Conduct can render a franchise agreement illegal, and by doing so, this can
negatively impact the value of the businesses of both franchisees and
franchisors.
However this case is not without precedent, and
similarities between this and a previous case provides reason to believe that
franchising as a whole may emerge stronger for the experience, whatever the
outcome.Read more
Islamic
franchisor sued for racial discrimination
An African-American couple are suing the Islamic
investment bank that now owns the Church’s Chicken chain in the United States
for racial discrimination after their franchise failed because they were
refused permission to sell pork products even though other white franchisees
were permitted to sell the same items.Read more
Another Blue
Chip company bites the dust
Blue Chip New Zealand Ltd has today been placed in
liquidation by its Australian parent, bringing to 20 the number of failed
companies attached to the mortgage investment scheme franchise.Read
more
Franchisee loses
sexual harrassment case
Proving that sexual harrassment claims are not
limited to government or large private sector organisations, a McDonalds
franchisee in the United
States has lost a sexual harrassment suit,
and will be required to pay more than US$505,000 to former staff who were
sexually touched and bitten by a store manager.Read
more
Hitler salute ad
creates pizza Hell; T-shirt self expression upheld
Local franchise chain Hell Pizza claimed the top
two most complained-about ads in New Zealand in 2007, with one ad featuring
nazi dictator Adolf Hitler saluting with a slice of pizza in his hand.Read
more 1
Meanwhile in the United States, a retailer selling
t-shirts with a parody of the Wal-Mart logo, changed to read “WaloCaust”, has
been found not guilty of trademark infringement on the basis of the retailer’s
right to self-expression, and that no reasonable person could confuse the
parody with the real Wal-Mart logo. Read
more 2
25 years of Jims
In a recent profile article, franchising icon Jim
Penman talks about 25 years of service franchising, his lessons from the past,
his current ambitions, and what the next 25 years might hold. Read
more
Negotiate the best retail leasing deal – May seminars
How to negotiate the best
retail leasing deal for franchisors and franchisees.
Patricia
Ilhan, wife of Crazy John’s
mobile phone chain founder John Ilhan has joined the retailer’s board.
L.J.
Hooker has appointed Colin Judd
to the position of General Manager, L.J. Hooker NSW, ACT, Victoria, Tasmania
and Specialist Portfolios.
Peter
Easton has joined Bakers Delight
as Franchise Development Manager.
Gavin
Morris has joined Metricon Homes
as Franchising Manager.
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