Bob Jane T-Mart’s parent company has been pulled up by the Australian Competition and Consumer Commission for failing to comply with franchising regulation.
The Bob Jane Corporation has given the ACCC a court-enforceable undertaking to comply with its obligations under the Franchising Code of Conduct in relation to renewal and extension of franchising agreements.
The ACCC was concerned that the independent tyre business, trading as Bob Jane’s T-Marts, failed to notify some franchisees in time about the renewal or extension of their franchise agreements.
ACCC deputy chair Mick Keogh said “Under the Franchising Code, franchisors must notify franchisees in writing whether they intend to extend or renew the agreement prior to the expiry of the agreement.
“This is an important obligation as it allows franchisees to make informed decisions about the future direction of their business.
“Franchisors must ensure they comply with their obligations under the Code. We took this action because we were concerned that Bob Jane failed to meet a number of its obligations,” Keogh said.
The regulator also had concerns that the right documentation was missing from some extended agreements.
Bob Jane has acknowledged that its conduct was likely to have contravened the Franchising Code of Conduct and section 51ACB of the Competition and Consumer Act 2010.
As part of the undertaking, Bob Jane has agreed not to terminate any franchise agreements operating under interim arrangements without providing six months’ written notice.
As required by the Code, it will also obtain written notice from franchisees that they have received, read and had a reasonable opportunity to understand disclosure documents and the Code before entering into, renewing, transferring or extending the term or scope of franchise agreements.
Bob Jane has also undertaken to implement and maintain a three-year compliance program.
“Ensuring small businesses receive the protections of competition and consumer laws, with a focus on the Franchising Code, is a current compliance and enforcement priority for the ACCC,” Keogh said.
Bob Jane operates both company owned and franchised tyre stores.
This story originally appeared on sister site Inside Franchise Business.