Franchisor Releases Franchisees

Under direction from the Australian Competition and Consumer Commission, Australian Loans Management has agreed to release franchisees from their franchise agreements and issue refunds.

ALM had claimed these licence agreements were not franchising agreements.  But they were wrong.

In what would be considered to be somewhat misleading and deceptive commentary, Graeme Samuel, ACCC Chairman suggested;

The Franchising Code provides important safeguards to help ensure prospective franchisees are fully informed about what they are buying. The disclosure requirements are a key feature of the Code and failure to provide a disclosure document is unacceptable and unlawful conduct.  

Franchisors cannot circumvent the Code by simply claiming that the agreement is not a franchise agreement. 

It could be suggested that the few people in Australia that can keep a straight face when suggesting the Franchise Code of Conduct is effective would be Samuel, FCA and their buddy the Minister, Craig Emerson. 

The ACCC site reference to ALM

Misleading & Deceptive Conduct & the ACCC