The ACCC recommends 10 Changes to the Franchising Code.

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MTA members will be interested in developments to the Franchise Code of Conduct and Oil Code that regulate the conduct of contracts, franchise agreements and wholesalers and fuel resellers who are involved in the sale, supply or purchase of declared petroleum products, such as unleaded petrol and diesel.

Recommendations from the ACCC’s recent submission include the following:

1.Civil pecuniary penalties for breaches of the Code to ensure they are a meaningful deterrent

2.Civil pecuniary penalties for failure to comply with notices issued by the ACCC under s51ADD of the Competition and Consumer act

3.Providing pecuniary penalties and infringement notices for including unfair contract terms in a standard form contract

4.Increase the qualifying threshold for protections for Small business where Unfair Contract terms are found

5.Section 155 notices to allow the ACCC to investigate whether a standard form contract contains unfair contract terms

6.Amend disclosure requirements about establishment costs and other expenses

7.Require franchisors to disclose certain financial information where someone is considering taking over an existing franchise

8.Prohibit franchisors from passing on legal costs for preparing, negotiating and executing documents

9.Amend the Oil Code to include record keeping obligations about giving notice to a franchisee

10.Amend the Oil Code’s fuel reselling provisions including a general obligation about good faith dealing

MTA members can review the ACCC’s submission by clicking here.

Of particular interest to MTA members is the ability of the ACCC to investigate further, whether or not a complaint was lodged, where they believe a contract has unfair terms.

This document also contains important information on common issues such as third-line forcing, Exclusive Territories and Setting Prices and the ACCC’s approach to investigating whether certain practices breach competition law.

The MTA will review these recommendations and will be asking members in the near future to comment on any submission opportunities which may develop as a result of the ACCC’s submission.

If this article sparks a question about your franchise agreement, contact Nathan Groves by clicking here.