ACCC: 'Spray Pave' to amend false advertising

Monday, 27 July 2009

The Australian Competition and Consumer Commission (ACCC) has announced a paving company which claimed to be a franchise and to be part of an international group has agreed to stop making those representations as part of a court enforceable undertaking accepted by the ACCC.

The company, Spray Pave Australia Pty Ltd, is a seller of Spray Pave businesses which provide spray-on concrete treatment for (primarily) domestic areas such as driveways and outdoor recreation areas.

"Any claims that a business is a franchise is likely to have a significant impact on whether someone purchases that business," ACCC Chairman Graeme Samuel said. "It is important that the nature of business opportunities is not misrepresented."

He said the ACCC was particularly concerned that potential purchasers of a Spray Pave business would believe that they were buying into a franchise system that had the protection of the Franchising Code of Conduct and the benefits of an established franchise system when this was not the case.

Spray Pave Australia has acknowledged that it is likely to have breached the Trade Practices Act 1974 by:

• advertising on various franchising websites, and representing that it is a franchise when it is not a franchise;
• representing on its own websites that it is an international business with offices operating in Africa, America, Canada and India, when it does not have offices in these countries; and
• making statements on a franchising website that no qualifications are necessary to operate a Spray Pave business when a builder's licence is required in South Australia, New South Wales and Queensland to conduct spray paving work.

The ACCC was concerned that by making these representations, Spray Pave was making false and misleading claims about its business activities in breach of the Act.
Spray Pave has provided court enforceable undertakings to the ACCC that it will not, for a period of three years, make any of the representations above unless the representation can be substantiated, that it will place corrective notices on the various websites and that it will implement a Trade Practices Compliance program.