Posted by Elizabeth Gore-Jones
on 14 December 2023
Delicia Franchising has admitted in an undertaking provided to the ACCC that it breached the Franchising Code.
The ACCC identified that the Franchisor’s Annual Marketing Fund Statement for a number of years had not provided sufficient detail of the receipts and expenses for the Fund.
Also, the Franchisor did not provide the financial statements within 30 days.
The Franchisor has committed to:
- preparing Annual Marketing Fund Statements with sufficient details and giving them to its franchisees within 30 days;
- sending a corrective notice to its franchisees advising them of the ACCC investigation and commitments made in its undertaking;
- implementing and maintaining a compliance program for 3 years; and
- paying a penalty of $11,100.00.
Although the above should act as a warning to franchisors, of further concern to a franchisor would be:
(a) the requirement to disclose in its Disclosure Document that it was required to give the enforceable undertaking to the ACCC; and
(b) the poor publicity surrounding its failure to comply with its obligations.
The undertaking can be viewed here and the media release from the ACCC can be accessed here.
We are able to assist franchisors in complying with their obligations under the Code and avoiding the above consequences of a failure to do so.
