ACCC Compliance Audits – Be Prepared!
by
Norton Rose
It may surprise some to know that currently the ACCC is only able to investigate a franchisor if there is a belief that there may have been a breach of the Code. The ACCC sees this restriction as impeding its capacity to be pro-active in its role as industry regulator. The Franchise Council of Australia is understood to be generally supportive of this change.
The ACCC submission to the Federal inquiry also suggests that consideration be given to amending the Trade Practices Act to enable a court to order significant pecuniary penalties (fines) for breach of the Code. The FCA is less keen on this recommendation, particularly as the fines could be substantial based if the current penalty provisions in the Trade Practices Act are adopted.
Whatever the outcome, Code and Trade Practices Act compliance is likely to have more serious consequences. Franchise systems would be prudent to begin auditing their own compliance to ensure that if these recommendations become law they can be confident that they will pass scrutiny. It would be worth commencing this exercise now, as with the Federal inquiry reporting early December it is possible the changes could occur before the next chance to update the disclosure documentation in 2009.
Deacons can organise fairly simply a compliance audit that will give you an idea of where you stand, and what areas may need attention.
By Stephen Giles
Deacons is Australia's leading franchise law firm, with offices in Melbourne, Sydney, Perth, Brisbane, Canberra and in 11 locations in Asia. We have assisted over 200 franchise companies, from large international corporations to start up franchisors. We do not handle franchisee matters. 02.10.2008
FCA Member
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