Franchising.net.au:

Australian Loans Management has agreed franchisees can be released from their agreements and issued refunds following a failure by the franchisor to comply with the Franchising Code of Conduct.

The Australian Competition and Consumer Commission chairman, Graeme Samuel, said “Australian Loans Management (ALM) promoted and sold licence agreements for a finance broking business called Active Money (AM). ALM claimed these licence agreements were not franchising agreements. ALM also failed to comply with the Franchising Code of Conduct.”

A failure to comply with the mandatory industry code constitutes a breach of the Trade Practices Act 1974. The ACCC raised concerns that Australian Loans Management had failed to provide prospective franchisees with a copy of the Code, a disclosure document and a copy of the franchise agreement 14 days before entering the agreement or making a non-refundable payment, had neglected to provide franchisees with a seven day cooling off period, and had not obtained statements from the franchisees prior to signing their agreement that they had been given independent legal or business advice or had been told by ALM to obtain the advice but chosen not to seek it.

Related posts:

1. Quick Tips For Franchisors – Preparing Your Disclosure Document Mondaq News Alerts: All franchisors know that they must...
2. When Can A Franchisor Refuse To Consent To Transfer Of A Franchise? Linex Legal: The Franchising Code of Conduct provides that...
3. Why Franchisors And Franchisees Disagree About Franchise Support Smart Company: One of the reasons for the failure...
4. If A Franchisor Declares Bankruptcy, What Happens To The Franchisees? Entrepreneur.com: Question asked by Sally Waller: I’m considering purchasing...
5. Troubled Franchisees: Franchisor To The Rescue? Weathering the current economic storm requires clear, level-headed thinking and...

Related posts brought to you by Yet Another Related Posts Plugin.