The Australian Competition and Consumer Commission has slammed a paving company, which claimed to be a franchise and part of an international group in order to try and sell business units.
Spray Pave Australia is a seller of Spray Pave businesses which provide spray-on concrete treatment for driveways and outdoor recreation areas.
After an investigation by the consumer watchdog, Spay Pave Australia has been forced to admit that it is likely to have breached the Trade Practices Act by:
- Advertising on various franchising websites, and representing that it is a franchise (and thereby operating under the Franchise Code) when in fact it is not a franchise.
- Advertising on its own websites that it is an international business with offices operating in Africa, America, Canada and India, when it does not have offices in these countries.
- Making statements on a franchising website that no qualifications are necessary to operate a Spray Pave business when a builder's license is required in South Australia, New South Wales and Queensland.
Spray Pave has provided court enforceable undertakings to the ACCC that it will not make any of these claims for the next three years unless they can be substantiated. It will also place corrective notices on the various websites.
ACCC chairman Graeme Samuel says the watchdog was particularly concerned that potential purchasers of a Spray Pave business would believe that they were buying into a franchise system that had the protection of the Franchising Code of Conduct
"Any claims that a business is a franchise is likely to have a significant impact on whether someone purchases that business. It is important that the nature of business opportunities is not misrepresented."
