Franchising Council of Australia Threatens Franchise Owner

The Final Report of a recent federal Franchising Inquiry highlighted the matter of parliamentary priviledge regarding the behaviour of two directors of the Franchise Council of Australia (FCA). The Final Report stated:

“The correspondence received by the committee provided clear evidence that the person who had made the submission was being threatened with a ‘penalty or injury’ as a direct result of making that submission.”

The committee chair further stated “through the use of a letter, threatened and intimidated a franchisee for making a written submission to the Inquiry, threatening action against the franchisee if he made a verbal submission to the Inquiry”.

This behaviour was exposed in Appendix 3 of the Final Report (pdf) and concerns a letter written by Deacons Law firm partner (see pg. 4), Mr Stephen Giles. Stephen Giles is on the Board of Directors of the FCA. The letter was written on behalf of the Poolwerx franchisor, Mr John O’Brien, chairman of the FCA.

The receiver of this letter was a Poolwerx franchisee, Damien Hansen, who is in dispute with the Poolwerx franchisor, and who had made a written submission to the Inquiry. If Damien Hansen lacked the courage to send this threatening letter on to the Committee, the conduct of the FCA and Poolwerx would have gone unknown.

How often do such things happen and go unreported?

This issue is serious. The FCA proclaim they represent franchisors AND franchisees, and whilst this has been challenged on many fronts and shown to be false, their actions here exposes the true nature of the FCA and the treatment metered out to the franchisees of FCA-franchisor members.

Stephen Giles proudly states that his law firm Deacons represents over 300 franchisors. Deacons is the law firm retained by Bakers Delight against Deanne de Leeuw who is pursuing Bakers Delight under the Unfair Contracts provisions of the Industrial Relations Commission (NSW).

Giles wrote in the letter:

“Our client reserves its rights to take action in relation to any defamatory or libellous comments in the written submission, and is concerned to ensure that your client does not repeat them in verbal comments to the federal inquiry. Given this warning, our client will view any repeat of the allegations to be deliberate and calculated to defame it.”

The Chairman of the Parliamentary inquiry into franchising, Mr Bernie Ripoll MP obviously thought the issue was serious enough to attach the correspondence as a special appendix to his Final Report.

Mr Ripoll stated in his report that the letter:

“provided clear evidence that the person who had made the submission was being threatened with a ‘penalty or injury’ as a direct result of making that submission”.

The letter to Giles from the secretary of the committee included the statement that Giles’ and his clients actions “may constitute a contempt of Parliament and a criminal offence”. Giles with a letter to the committee withdrawing his original letter to the franchisee and apologising “unreservedly to the Senate and the Committee”. Ripoll says in his report that the matter is now closed.

This should not be brushed aside. This issue is at the heart of most of the franchisee submissions; the threatening and intimdatory behaviour metered out by their franchisor. And here is the FCA, blatently doing it, and being seen to get away with it.

And what about the franchisee?

Unfortunately, he was not included in the apology. He is still in dispute. And while the Committee might now believe that the matter is closed, for Damien Hansen the nightmare continues.

Author's note: This is a similar story to mine whereby the franchisor attempted to breach me for not meeting several revenue targets. The breach was thrown out, and I to, due to continued efforts from the franchisor to make life a mysery, had no other option but to sell up and move on.