Franchisors Cash Converters Pty Ltd and MTA - Mobile Travel Agents Pty Ltd (MTA) have each paid a $16,500 penalty after the ACCC issued both companies with an infringement notice after they each allegedly breached the Franchising Code of Conduct.
The ACCC alleges that second-hand goods retailer and pawn broker Cash Converters, and travel agency MTA, each failed to meet their obligation to annually update or confirm franchisor information on the Franchise Disclosure Register as required by the Franchising Code of Conduct.
The Franchise Disclosure Register is an online register hosted and administered by the Department of the Treasury. It is a free service intended to give prospective franchise buyers, current franchisees and professional advisers access to information provided by franchisors.
"The requirement for franchisors to maintain accurate and up-to-date public profiles on the Register ensures prospective franchisees and other stakeholders have clear and accurate information to help them make informed business decisions, including whether to enter into a franchise agreement," ACCC Deputy Chair Mick Keogh said.
"A franchisor's failure to maintain up-to-date information on the Register undermines transparency for prospective franchisees, and the reliability and integrity of the Register."
The ACCC will continue to monitor the franchising sector's compliance with the Franchising Code of Conduct including the Register obligations.
"The Franchising Code of Conduct applies to franchising in Australia to help address some of the problems caused by the power imbalance in the franchise relationship," Mr Keogh said.
"Failure to comply with the requirements of the Franchising Code of Conduct may result in penalties or other enforcement action by the ACCC."
One of the ACCC's enduring compliance and enforcement priorities is to ensure that small businesses receive the protections of competition and consumer laws, including mandatory industry codes such as the Franchising Code of Conduct.
More information for current and potential franchisees, and for franchisors, is available on the ACCC website at Franchising Code of Conduct.
Background
MTA is an Australian-based travel agency offering personal travel planning services. It has approximately 488 franchisees and operates nationally.
Cash Converters offers buying and selling of second-hand goods, pawn broking and personal loans. In Australia, it has about 74 franchisee-owned stores and 79 corporate-owned stores.
Note
The ACCC is responsible for regulating industry codes that are prescribed under the Competition and Consumer Act, including the Franchising Code of Conduct. The Franchising Code of Conduct is a mandatory national code that regulates the conduct of franchising participants towards each other.
The Franchising Code of Conduct sets out, among other things:
- franchisors' disclosure requirements
- how disputes between parties to a franchise agreement should be resolved, and
- when franchisors must include or update information on the RegisterThe ACCC can issue an infringement notice when it has reasonable grounds to believe a person or business as contravened certain provisions of an industry code.
A person or business is not regarded as having contravened the provision of the industry code merely by paying the penalty specified in an infringement notice.
On 18 March 2025, the Government announced it will provide $7.1 million over two years to strengthen the ACCC's enforcement of the Franchising Code of Conduct. This funding uplift enables the ACCC to undertake more education, enforcement and engagement in the franchising sector.
