$200,000 fine for ex-managing director of franchisor
The ACCC prosecuted Jurlique International Pty Limited for resale price maintenance. The penalties totalled $3.4m against four companies in the Jurlique group and $200,000 against Dr Jurgan Klein, the former managing director. Dr Klein has the dubious distinction of being involved in a record penalty for resale price maintenance.
Why did the ACCC prosecute?
Jurlique threatened that it would stop supply of products to franchisees unless the franchisees agreed to maintain prices above a minimum price.
Lesson for franchisors
What is especially relevant for franchisors is that in determining the penalty, the Judge took into account Jurlique’s market power in relation to its franchised stores. He said that a threat to stop supply of product to a franchised store would effectively ruin the franchisee’s business. Franchisors who are in this position can expect extremely hefty fines if they breach the resale price maintenance provisions of the Trade Practices Act.
Thomson Playford Cutlers works with franchisors as a strategic partner to improve overall network performance. We manage compliance issues and address the legal considerations that contribute to franchise network efficiency, profitability and expansion.
18.02.2008
FCA Member
Thomsons Lawyers News
Thomsons Lawyers on franchising and the SA Small Business Commissioner Act 2011
28/11/2011 - The Small Business Commissioner Act 2011 was passed in the ...
Thomsons Lawyers law firm expands scope with new Brisbane office
25/10/2011 - Thomsons Lawyers has recently expanded its national ...
Thomsons Lawyers' franchising law firm the strategic partner all franchisors need
22/09/2011 - Thomsons Lawyers are a specialist commercial law firm with ...
Thomsons Lawyers support NTT acquisition of 70% of Frontline Systems
20/06/2011 - Thomsons Lawyers has assisted an acquisition by NTT Communications ...
New mandatory reporting requirements to be introduced for consumer products and services, reports Thomsons franchise lawyers
27/10/2010 - Franchise lawyers from Thomsons Lawyers have noted that a new ...
Thomsons franchise lawyers report on amendments to Franchising Code of Conduct
9/09/2010 - Recent changes made to the Franchising Code of Conduct are now ...
Contact Thomsons Lawyers
Tel: 02 8248 5800
Fax: 02 8248 5899
