Posted by Elizabeth Gore-Jones
on 10 January 2018
Amongst other things, the franchisor for the Pastacup franchise system and its director have been ordered to pay the following pecuniary penalties:
1. the franchisor is to pay $100,000; and
2. the franchisor's director is to pay $50,000.
Both the franchisor and its director must pay the legal costs of the ACCC in the amount of $12,000.
These orders were made because the court found that the franchisor and its director should have disclosed that the director was previously a director of 2 companies who had previously been franchisors of the Pastacup franchise system and they had been wound up because of insolvency.
Learnings: Franchisors should disclose all relevant information in disclosure documents to meet their obligations.
Author:Elizabeth Gore-JonesAbout: Elizabeth specialises in franchising law. She lectures at Bond University PLA in franchising, she sits on the Queensland Law Society Franchising Committee, she is a past member of the Women in Franchising committee and a past member of the Franchise Council of Australia.
Connect via:TwitterLinkedIn 
