The Australian Competition and Consumer Commission has settled its legal proceedings against the franchisor of mobile repair services for vehicle paint, plastics and interiors, Kwik Fix International Pty Ltd, its director Mr David Bruckshaw and former director Mrs Kerry Bruckshaw.
The ACCC began legal proceedings under the Trade Practices Act 1974 in the Federal Court, Brisbane in April 2002, in relation to allegations a former franchisee was misled as to the purchase price of a franchise. The ACCC also alleged the respondents had failed to comply with certain requirements of the Franchising Code of Conduct and had acted unconscionably towards the franchisee.
To resolve the matter Kwik Fix and the Bruckshaws have agreed, without admissions, to repurchase the franchise and have consented to court orders restraining them from engaging in conduct similar to that alleged. Kwik Fix will also implement and undertake a trade practices compliance program in relation to the relevant provisions of the Act. Each party has agreed to bear its own costs.
As part of those undertakings Kwik Fix will also implement procedures in relation to its obligations as a franchisor under the Franchising Code of Conduct. Among other things, before the parties enter into the franchise agreement, a franchisor must get confirmation a potential franchisee had the opportunity to take legal or financial advice, and has received and had a reasonable opportunity to understand the franchise disclosure document and a copy of the code.