The imposition of penalty provisions under the Franchising Code, which provisions came into effect on 1 January 2015, has changed the risk profile of franchising and made compliance a greater focus for franchisors. The Franchising Code contains financial penalties for breaches of certain provisions of up to AUD63,000 (per breach per franchisee) and infringement notices (AUD10,500 for body corporates and AUD2,100 for individuals and other entities).
Examples of the application of these penalties and infringement notices being used in franchising are set out below.
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The above penalties show the ACCC's willingness to impose penalties for contraventions of the Franchising Code. For some franchisors, it may alter the risk profile they have previously used when judging the consequences of non-compliance with the Franchising Code. A checklist of the relevant provisions that attract a penalty is available from our office on request.