ACCC begins proceedings against Franchisor

Tuesday, 25 August 2009

The Australian Competition and Consumer Commission (ACCC) have begun proceedings against Personalised Chocolates 4U Pty Ltd (PC4U) and its sole director for alleged contraventions of the Trade Practices Act 1974.

The ACCC alleges that PC4U marketed and sold personalised chocolate franchises by making false, misleading and deceptive representations, including:

• that software required for the franchise business would be provided to franchisees when it was not;
• that a manual for running the franchise business would be provided to franchisees when they entered the franchise agreement when it was not; and
• that refunds of franchise fees were available on certain conditions when some of those conditions were impossible for the franchisee to meet.

The ACCC also alleges that PC4U is now promoting itself as a licence system rather than a franchise system. It is further alleged that PC4U has failed to comply with various other obligations under the Franchising Code of Conduct.

The ACCC has also taken action against PC4U's sole director for allegedly being involved in PC4U's conduct. The ACCC seeks various orders including declarations, injunctions, costs and orders that PC4U implement a trade practices compliance program, and that the sole director attend trade practices law compliance training.

The matter has been filed and is listed for a scheduling conference in Sydney on 28 August 2009 before Justice Buchanan.