According to their website "the (Allphones) retail network is now in every Australian State and Territory, with 160 outlets and over 100 franchisees.
These extracts below from the ACCC News Release dated 27 march 2008.
The ACCC has commenced proceedings in the Federal Court in Sydney against Allphones Retail Pty Limited.
The ACCC alleges that, in operating this franchise system, Allphones failed to comply with Franchising Code of Conduct and engaged in misleading and deceptive conduct and unconscionable conduct towards its franchisees in contravention of sections 51AC, 51AD, 52 and 59 of the Trade Practices Act 1974.
What's Section 51AC?
It applies to conduct which is, 'in all the circumstances, unconscionable'. It sets out several factors the court can consider in deciding whether conduct was unconscionable. They include, but are not limited to:
• the relative bargaining strength of the parties
• whether the stronger party imposed conditions that were not necessary to protect their legitimate business interest
• the use of undue influence, pressure or unfair tactics
• whether the weaker party could obtain supply on better terms elsewhere
• whether the stronger party made adequate disclosure to the weaker party
• the willingness of the stronger party to negotiate
• the extent to which each party acted in good faith
• the requirements of any relevant industry code.
These factors are not exhaustive and the court will consider the conduct as a whole, including other factors that have not been listed above, when determining whether particular conduct is unconscionable.
What's Section 51 AD?
It provides that a corporation must not contravene an applicable industry code. The Franchising Code of Conduct, is a proscribed industry code under the Trade Practices Act 1974. It must therefore NOT be contravened.
The code aims to ensure that franchisees are sufficiently informed about the franchise before entering into it, and it also provides a mechanism for franchisees and franchisors to try to resolve disputes by using a cost effective dispute resolution procedure.
Failure to comply with the code (by not providing sufficient info etc) amounts to a contravention of section 51AD of the Trade Practices Act.
The ACCC alleges that Allphones engaged in conduct towards its franchisees in the operation of its franchise system including:
• implementing policies targeting classes of franchisees
• forcing franchisees to acquiesce to Allphones' will by threatening or engaging in a pattern of harsh conduct, and
• failing to disclose or pay certain income to franchisees which in all the circumstances was unconscionable within the meaning of s51AC of the Act.
The ACCC also alleges that Allphones engaged in false or misleading and deceptive conduct towards potential and current franchisees. This includes allegations that Allphones misrepresented how it shares profits with franchisees, bargains with third parties on behalf of its franchisees and operates its franchise system.
Further, the ACCC alleges that Allphones contravened s51AD of the Act by failing to comply with clauses 6, 7, 11, 15 and 29 of the Franchising Code of Conduct.
A directions hearing will be held in the Federal Court before Justice Rares on 11 April 2008.
Past and present Allphones franchisees who have inquiries about these proceedings may contact the ACCC on 1300 302 502.
These extracts below from the ACCC News Release dated 27 march 2008.
The ACCC has commenced proceedings in the Federal Court in Sydney against Allphones Retail Pty Limited.
The ACCC alleges that, in operating this franchise system, Allphones failed to comply with Franchising Code of Conduct and engaged in misleading and deceptive conduct and unconscionable conduct towards its franchisees in contravention of sections 51AC, 51AD, 52 and 59 of the Trade Practices Act 1974.
What's Section 51AC?
It applies to conduct which is, 'in all the circumstances, unconscionable'. It sets out several factors the court can consider in deciding whether conduct was unconscionable. They include, but are not limited to:
• the relative bargaining strength of the parties
• whether the stronger party imposed conditions that were not necessary to protect their legitimate business interest
• the use of undue influence, pressure or unfair tactics
• whether the weaker party could obtain supply on better terms elsewhere
• whether the stronger party made adequate disclosure to the weaker party
• the willingness of the stronger party to negotiate
• the extent to which each party acted in good faith
• the requirements of any relevant industry code.
These factors are not exhaustive and the court will consider the conduct as a whole, including other factors that have not been listed above, when determining whether particular conduct is unconscionable.
What's Section 51 AD?
It provides that a corporation must not contravene an applicable industry code. The Franchising Code of Conduct, is a proscribed industry code under the Trade Practices Act 1974. It must therefore NOT be contravened.
The code aims to ensure that franchisees are sufficiently informed about the franchise before entering into it, and it also provides a mechanism for franchisees and franchisors to try to resolve disputes by using a cost effective dispute resolution procedure.
Failure to comply with the code (by not providing sufficient info etc) amounts to a contravention of section 51AD of the Trade Practices Act.
The ACCC alleges that Allphones engaged in conduct towards its franchisees in the operation of its franchise system including:
• implementing policies targeting classes of franchisees
• forcing franchisees to acquiesce to Allphones' will by threatening or engaging in a pattern of harsh conduct, and
• failing to disclose or pay certain income to franchisees which in all the circumstances was unconscionable within the meaning of s51AC of the Act.
The ACCC also alleges that Allphones engaged in false or misleading and deceptive conduct towards potential and current franchisees. This includes allegations that Allphones misrepresented how it shares profits with franchisees, bargains with third parties on behalf of its franchisees and operates its franchise system.
Further, the ACCC alleges that Allphones contravened s51AD of the Act by failing to comply with clauses 6, 7, 11, 15 and 29 of the Franchising Code of Conduct.
A directions hearing will be held in the Federal Court before Justice Rares on 11 April 2008.
Past and present Allphones franchisees who have inquiries about these proceedings may contact the ACCC on 1300 302 502.
