Posted by Elizabeth Gore-Jones
on 1 May 2020
The Franchising Code of Conduct requires that a franchisor advise a franchisee in writing at least 6 months before the end of the franchise term whether or not the franchisor intends to renew or extend the franchise agreement.
A failure to comply with this clause can attract a maximum financial penalty of $63,000.
Bob Jane Corporation failed to notify some of its franchisees in accordance with the above requirements.
Bob Jane gave a court enforceable undertaking that it would comply with its obligations under The Franchising Code of Conduct.
It also gave an undertaking that it would not terminate any franchise agreements operating under interim arrangements without providing the 6 months written notice.
Bob Jane also gave an undertaking to implement and maintain a compliance program for 3 years.
More details can be found in release number 86/20 by the ACCC.
Franchisors should diarise important dates to ensure compliance with the Code.
