Consent orders have been made against a Townsville company, Goldseal Australia Pty Ltd and its director, Mr Norman English for misleading and deceptive conduct in relation to the sale of franchises in North Queensland.
The franchises involved a waterproofing product known by various names, among them being Goldseal Polyshield SS-100.
The Australian Competition and Consumer Commission had alleged that Goldseal, through Mr English, falsely represented to one franchisee that: · Mr English had invented and developed the waterproofing product; · Mr English had obtained sponsorship or approval in relation to the waterproofing product from the Housing Industry Association, the Queensland Master Builders Association and the Waterproofing Industry Council of Australia; and · Goldseal had passed an independent assessment in relation to the waterproofing product by Standards Australia.
The ACCC also alleged that Mr English and Goldseal later represented to a second franchisee that they had developed the waterproofing product.
The ACCC alleged that Goldseal had made false or misleading representations and had breached the fair trading provisions of the Trade Practices Act 1974 and that Mr English had been knowingly concerned in the alleged conduct.
Mr English and Goldseal admitted that they had breached the Act in making those representations and agreed to:
- findings of fact in which they admitted representations in breach of the Act;
- declarations that Goldseal and Mr English had not invented or developed the product and did not have the approval or sponsorship as alleged by the ACCC and therefore had breached the Act; and
- injunctions preventing both Goldseal and Mr English from making representations, similar to those in breach of the Act, in the future.
Mr English also agreed to contribute towards the legal costs of the ACCC.
As a result of the agreed findings of fact produced to the Court, the affected franchisees may, if they choose, take further action themselves against Goldseal and Mr English.
"This is an excellent result for small businesses", ACCC Chairman, Professor Allan Fels, said today. "The ACCC continues to have a strong focus on protecting small businesses from unfair or misleading conduct. Franchisors should ensure that when promoting their franchises that any representations they make are truthful and aren't likely to mislead prospective franchisees.
"This successful result also shows that the ACCC has a presence across Australia, including regional areas such as Townsville where the matter originated".
The orders were made on 7 March 2000.