ACCC to target franchise industry

"People that seek to prey on those potential small business operators are on notice that the ACCC will not tolerate, what effectively, is criminal behaviour," he said.

www.smh.com.au
February 24, 2005

ACCC to target franchise industry

The Australian Competition and Consumer Commission (ACCC) is targeting rogue operators in the franchise industry.

ACCC chairman Graeme Samuel told the Australia-Israel Chamber of Commerce in Brisbane the franchising industry turns over around $80 billion a year.

But he said it also attracts a number of "unscrupulous operators".

"The ACCC is taking a hard line against blatantly deceptive conduct and those involved risk possible criminal sanctions," he said.

"We are already examining a number of different scenarios which we believe are criminal and are taking steps to not only shut down the perpetrators but to impose criminal sanctions.

"The ACCC is examining the options available in taking criminal proceedings for those people that are flagrantly in breach of the law."

Mr Samuel said the ACCC was investigating three key areas - the non-compliance of the franchising code; misrepresentation and; unconscionable conduct.

He said in particular the ACCC was targeting operators who grossly misrepresent the benefits, financial rewards or viability of a particular operating system.

"People that seek to prey on those potential small business operators are on notice that the ACCC will not tolerate, what effectively, is criminal behaviour," he said.

Under the Trade Practices Act 1974, the ACCC could seek criminal penalties, of $1.1 million for corporations and $220 000 for individuals, for certain contraventions.

© 2005 AAP


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