Wednesday, 12 September 2018

Dodging a bullet!

Franchisee rights denied in Husqvarna code breach

I was a bit puzzled by the ACCC's settlement against Husqvarna Australia (which is part of the Swedish Husqvarna Group with annual revenues of $6 billion).

Husqvarna's Australian subsidiary has been claiming for well over 10 years that its agreements with 343 dealers are not franchise agreements, when that has not been the case. Furthermore, Husqvarna has terminated dealers without complying with the Franchising Code of Conduct (Code).

Husqvarna also has not reviewed its "franchise" agreements to identify potentially unfair contract terms, despite the law changing two years ago.

Finally, the company didn't even have a compliance program in place.

Despite all of this conduct, the ACCC decided not take any legal action against Husqvarna but rather to settle this raft of contraventions with a s87B undertaking.

On the other hand, the ACCC takes legal action against much smaller franchisors, with little brand recognition, that have been engaging in relatively minor contraventions of the Code for very short periods of time.

Such inconsistency in terms of the ACCC's enforcement approaches makes our job as lawyers particularly difficult. How do I explained the Husqvarna settlement to the next small business client who gets taken to court by the ACCC?

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