ACCC Deputy Chairman Dr Michael Schaper 7 October 2012 ACCC REPORT

Introduction Mandatory code under the Competition and Consumer Act 2010 Franchising Code of Conduct

Overview Past activities – Complaints, income claims, carbon Current activities – Consultation Committee, audit powers, pre-entry franchise course Enforcing the code

Complaints In the 2011/2012 financial year: – 636 franchising complaints – 226 enquiries Mix of general competition and Franchising Code of Conduct issues Decrease in termination-related issues Continuing issues: disclosure, misleading claims

Income claims July 2012: ACCC warning on inflated income claims Many complaints re cleaning and home services industry Franchisors appear to target people from non-English speaking backgrounds Franchisees need to do their due diligence

Carbon price claims Free to increase prices as you see fit Claims about the impact of the carbon price need to be truthful and have a reasonable basis

Carbon price claims Brumbys: – Internal newsletter to franchisees – Undertaking given to ACCC Genesis Fitness Club – Increases in gym fees – Infringement notice of $6,600 Liaison with FCA Carbon hotline:

Consultative Committee Revitalised membership Breadth of views Encouraging interest from industry

Audit powers Enable the ACCC to compel a franchisor to provide information or produce documents that it is required to keep, generate or publish under the Code. Info must be provided in 21 days 22 franchisors and 9 horticulture traders have been served an audit notice since January 2011 – generally compliant ACCCs approach: test compliance in the broader franchising sector

Griffith Uni pre-entry course Free online franchising education program …more likely to have positive franchising experiences 3000 have registered since 2010

Enforcing the Code What works and what doesnt Stronger sanctions act as a deterrence Example: those who subvert and avoid obligations

Conclusion Education and enforcement Fair and compliant environment