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ACCC Tells Franchising To Clean Up Act


Man in hazmat suit trying to clean up deadly mess. image by AZRainman.com

MELBOURNE, Australia — Newly appointed Chairman of the Australian Competition and Consumer Commission, Rod Sims, advised franchisors of his intention to assist franchising to clean up its act.

One of Australia's franchise news sites, Franchising.net.au, reported, " 'Franchising must smarten up its image,' that's according to the chairman of the Australian Competition and Consumer Commission Rod Sims, who was a keynote speaker at the Franchise Council of Australia's national conference today."

ACCC's leader Rod Sims
ACCC's Rod Sims

Mr. Sims brought up how the Australian government has had to launch four major reviews of the troubled franchising sector in the last twenty years. "In the last financial year the ACCC received just over 600 franchise-related complaints," states Sims in a nine-page report (pdf) to the Franchise Council of Australia, a trade and lobbying group that represents the interests of franchising firms.

Twenty-eight percent of the complaints include allegations of misleading and deceptive conduct.

While mentioning the ACCC's ability to monitor compliance, audit and investigate, Mr Sims may possibly have heralded a new era where the Commission can clean up its own image by actually using its powers. "One important area where we could do more is in relation to the information provided to franchisees in relation to their likely earnings," states Sims. "We can perhaps look more closely to see where franchisees have been mislead, and pursue pecuniary penalties and other remedies. Improvements in this area alone would greatly improve the reputation of franchising, and it’s an area where we can be more effective."

Dr. Michael Schaper, deputy chairman, added, "By ensuring that franchisees are aware of their rights and can access dispute resolution services, the ACCC is playing its part to ensure the franchising sector in Australia strengthens its standing and continues to grow."

Dr Schaper's comment made him sound as if he were unaware of submissions to three franchising inquiries that noted the manipulation of the Franchising Code of Conduct mediation process or the level of franchisor threats facing franchisees who lodge complaints.

There is no available record of the ACCC utilizing audit powers made available in January 2010.


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