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For every franchisee in Australia that has ever taken a complaint to the ACCC, the Refund Home Loans outcome is reinforcement of Australia's strange franchising standards.
It was an enormous surprise for RHL franchisees when an Australian Court found that they had been misled and Refund didn’t really have a special relationship with the ACCC after all. Most had believed an Ormond/ACCC bonding meant that claiming just about anything to existing and prospective investors was kosher.
Refund Home Loans and its managing director, Mr. Ormond, sincerely regret unexplainable lapses:
Mate, I've had meetings with Graeme Samuel himself. I have nothing to worry about. - Whoops
The franchisor declarations of inadvertent misdeeds to current and ‘some’ past franchisees and a brief peek at a statement of error published at the Refund Home Loans website has met with widespread awe. That statement, apparently much like franchisees, appears to have come and gone in a flash.
Surprisingly, a deal struck between franchisor Wayne Ormond and the ACCC led the Court to Order:
Using the name of the ACCC or individual ACCC officers as a means of discouraging franchisees from exploring their own legal rights is reprehensible. - ACCC chairman, ‘billowing clouds of smoke doesn’t mean fire’, Graeme Samuel
The ACCC was upset, declaring Mr Ormond’s poorly considered remarks were:
false and misleading and deceptive and in contravention of sections 52, 53(e) and 53(d) of the Act.
But the head of Refund Home Loans retorted that this was all wrong. The ACCC and the franchisor were actually mates, as was his happy relationship with the chain's franchisees.
We have no current disputes. All our franchisees are happy, I believe it is a couple of ex-franchisees with an axe to grind. - Wayne Ormond
The Refund Home Loans outcome doesn’t really point to the plight of franchisees under current legislation and regulation. After all, should franchisees be seeking remedy from breaches of the Franchising Code of Conduct and the Trade Practice Act they could always sell their neighbour’s house and get a lawyer.
A spokesperson for the FCA might even suggested that the ACCC/Court deal allows marginally upset franchisees a serious opportunity to actually win in an unemployment benefit funded civil action [the ‘UBFCA’].
An uninformed source suggested that the ACCC court deal, such as this one, does a whole lot to educate naughty franchisors that franchising isn’t a free-for-all and the consequences are not worth the 30 seconds of embarrassment.
The ACCC court finding on Refund Home Loans offers franchisees of every naughty franchise system in Australia another in a long list of reasons to have absolutely no confidence in the ACCC and the Australian legal system.
Industry stakeholders argue that this grand performance by the ACCC and its iron-fisted franchise rulings will lead to an avalanche of confident franchisees and complaints. NOT.
Refund Home Loans have to date declined any consideration of a refund to disappointed franchisees. A similar request to the ACCC has surprisingly not received a response by the time this column was posted.
An anonymous ex-franchisee suggested that Mr Ormond has an unappreciated but developed falsetto.