POPULAR WORDS

Rogue franchisors face a crackdown by Australia's competition watchdog that may involve the laying of criminal charges. Speaking in Brisbane today, Australian Competition and Consumer Commission chairman Graeme Samuel says it will be flushing out a "small group of rogue operators" in the industry. "Franchising is an extremely successful and rapidly growing aspect of Australia's small business sector," he says. "[However], the success of franchising has also attracted a number of unscrupulous operators looking to capitalise on the successful reputation of franchising." Samuel says the ACCC is examining with the Director of Public Prosecutions the possibility of criminal charges against those who breach the law. "We're taking a hard line against those rogues," he says. "Now we are proceeding with the Director of Public Prosecutions to enforce criminal sanction which means significant fines and that indelible mark against the name of the franchisors concerned." The ACCC will target three areas: non-compliance with the franchising code; misrepresentation; and unconscionable conduct. Samuel says it will not tolerate franchisors who don't providing adequate disclosure or who refuse to attend mediation when a dispute arises. He says the Commission won't be accepting "bullish and thuggish behaviour by franchisors to implement unnecessary and unreasonable changes on franchisees". And it will also investigate operators that misrepresent profit expectations, benefits or the viability of the franchise. Potential franchisees are being told to ask questions when looking at buying, but most importantly ask themselves, "is it too good to be true". Franchising contributes $80 billion a year to the Australian economy.