The Australian Competition and Consumer Commission has instituted proceedings in the Federal Court, Brisbane, against Kwik Fix International Pty Ltd (Kwik Fix) alleging unconscionable conduct, misleading and deceptive conduct, in breach of the Trade Practices Act 1974, and breaches of the Franchising Code of Conduct.
Kwik Fix is a franchisor of mobile repair services for motor vehicle paint, plastics and interiors.
The ACCC alleges that Kwik Fix misled a franchisee about the purchase price of a franchise, and made false or misleading representations as to the profitability and working hours of franchisees.
It is alleged that Kwik Fix engaged in unconscionable conduct by:
- threatening to terminate the franchise agreement in response to queries by the franchisee
- demanding the return of the van that the franchisee was using on one day's notice
- refusing to supply goods to the franchisee
- terminating the franchise agreement and demanding the franchisee, within two business days, return all goods supplied to him by Kwik Fix that are in his possession, and within five business days, pay all monies claimed to be owing in connection with the franchise.
The ACCC also alleges that Kwik Fix induced, or endeavoured to induce, the franchisee not to associate with other franchisees for a lawful purpose; failed to provide the franchisee with a disclosure document or copy of the code; and failed to meet other requirements of the code.
Kwik Fix has given undertakings to the ACCC that it will not, pending trial:
- demand the franchisee return the goods supplied to him by Kwik Fix that are in his possession
- seek to recover any amount claimed by Kwik Fix to be owing from the franchisee.
The director of the company, Mr David Bruckshaw, and a former director, Mrs Kerry Bruckshaw, have been joined in the proceedings as being allegedly involved in some of the alleged contraventions.
The ACCC is seeking the following remedies:
- declarations that Kwik Fix engaged in conduct in contravention of sections 51AC, 51AD, 52, 53(c), 53(e) and 59(2) of the Act and that Mr and Mrs Bruckshaw were involved in that conduct
- injunctions restraining Kwik Fix and its officers from repeating the alleged conduct
- declarations that the franchise agreement and related loan agreement are of no effect
- a refund of all money paid by the franchisee under the franchise agreement and loan agreement with interest
- the implementation of a trade practices compliance program by Kwik Fix and trade practices compliance training by Mr and Mrs Bruckshaw at their expense
- the ACCC's court costs.
A directions hearing for this matter is listed for 17 May 2002 in the Federal Court, Brisbane.