Franchisor Jim’s Group Pty Ltd has paid fines of $24,420 for alleged breaches by its Jim’s Dog Wash division.
The Australian Competition and Consumer Commission allege Jim’s misled a prospective franchisee and failed to fully disclose information required by the Franchising Code of Conduct.
The ACCC claims the disclosure document significantly understated the number of former franchisees within the Dog Wash division and failed to provide their contact details.
ACCC deputy chair Mick Keogh said “If someone is thinking about buying a franchise, being able to contact former franchisees is critical for making informed decisions.
“Under the Franchising Code, franchisors must provide prospective franchisees with a compliant disclosure document which provides specified information which is important to prospective franchisees.”
Keogh reminded franchisors that many disclosure documents need updating now.
“This action by the ACCC serves as a timely warning to all franchisors about the importance of ensuring these documents are compliant with the Franchising Code,” he said.
Jim’s Group fined for allegedly misrepresenting 14-day cooling off period
Jim’s Group also paid a penalty for an alleged false or misleading representation of the 14-day cooling off period. The franchisor allegedly indicated this deadline could be set from the earliest date of either signing the agreement, or paying a deposit. However the Code sets the 14 day period from the time of signing the agreement, even in the case of a previously paid deposit.
“By making this representation, Jim’s Group may have discouraged Jim’s Dog Wash franchisees from exercising their cooling off rights where they paid a deposit some time before they entered into a franchise agreement,” Keogh said.
“The ACCC will not hesitate to take enforcement action against franchisors who are failing to meet their obligations under the Code or are misleading prospective franchisees about their rights under the Code.”
Jim’s Group comprises 52 franchise divisions ranging from dog washing, mowing, and bookkeeping, to hiring party supplies. Internationally, there are more than 4,800 Jim’s franchisees, with the majority based in Australia.