The consumer watchdog says it will focus on ‘serious misconduct’ when looking to applying its new regulatory powers to companies found to have breached the new Franchise Code of Conduct.
The new code, due to be introduced 1 January 2015, will allow for the Australian Competition and Consumer Commission to issue fines from $8500 up to $51,000 for franchisors found to be doing the wrong thing.
The ACCC says it will use its new powers to focus on breaches to ‘key pillars’ of the revised Code.
“This is likely to include failure to act in good faith, failure to provide a disclosure document, refusal to attend mediation and unlawful termination of a franchise agreement,” ACCC deputy chair Michael Schaper says.
Schaper also explains what the possible introduction of a “good faith” obligation would mean for franchisors and franchisees.
“Fundamentally, good faith will require both parties to a franchise agreement to remain loyal to the contract they have entered into,” Schaper says.
“Acting for an ulterior purpose, or in a way that undermines or denies the other party the benefits of the contract are examples of conduct that may qualify as bad faith. While good faith requires you to have regard to the rights and interests of the other party, it does not prevent you from acting in your own legitimate commercial interests.”
Virgin chair to quit
Virgin Australia chairman Neil Chatfield will retire after seven years in the post.
Chatfield announced his intention today, saying he will leave when the suitable replacement for the role is found.
“After seven years as chairman, having seen through the company’s transformation to a diversified airline group under the leadership of chief executive officer John Borghetti and the successful completion of the game change program strategy, I believe that now is a good time to transition to a new chairman,” he said in a statement.
Local shares flat
The S&P/ASX200 benchmark was down 22 points to 5437 at 12:24pm AEDT. On Monday, the Dow Jones closed 12.53 points up, rising 0.07% to 16,817.9.