Australian Competition and Consumer Commission (ACCC) targeting franchises

Written on the 30 May 2014 by Macmillans Waller Fry - Accountants in Maitland

The Australian Competition and Consumer Commission (ACCC) announced late last year that it would begin targeting franchises in the Health and Fitness and Takeaway Food industries.

A new round of audits will be performed on these businesses to ensure that the franchisors are complying with the Franchising Code of Conduct.

The ACCC will be using their audit powers to request that business owners provide information or documents that franchisors are required to either keep, generate or publish.

It is important that franchisors of all industries- not just Health and Fitness and Takeaway Food, review their compliance with the Franchising Code of Conduct.

The ACCC has the power to audit any documents required to be generated under the Franchising Code, such as disclosure statements, marketing statements and franchise agreements.

When an audit begins franchisors will be required to immediately produce these documents.

The audit is currently focused on the Health and Fitness and Takeaway Food industries as these industries received the highest number of franchise-related complaints in 2012-13.

The two major complaints that the ACCC received were related to disclosure and false representation.

However, the ACCC has stated that the audits are not just restricted to these two sectors and that no franchisor is safe from a surprise audit.