Australia to Further Amend Franchise Law

The Australian Government recently announced that it will make further amendments to the Australian Franchising Code of Conduct based on a report by the Joint Committee on Corporations and Financial Services and the Senate Standing Committee on Economics.

The amendments to the Code of Conduct will provide that franchisees are entitled to protection from unconscionable conduct during the course of the franchise relationship, and not only in relation to the signing of the franchise agreement. The new amendments provide for penalties of up to $1.1 million for corporations and $220,000 for individuals that engage in unconscionable conduct, or make false or misleading representations.

In addition, the amended law will allow the Australian Competition and Consumer Commission (the “ACCC”) to conduct random audits of compliance with the Franchising Code of Conduct, and to seek remedies on behalf of all franchisees subject to a particular franchise agreement. Finally, the amendments allow ACCC to issue public warnings “about rogue or unscrupulous” franchisors.

Please contact Larkin Hoffman’s franchise and distribution practice group with further questions.