Husqvarna Australia Pty Ltd

The Australian Competition and Consumer Commission (ACCC) has accepted a court enforceable undertaking from Husqvarna Australia Pty Ltd (Husqvarna) in relation to claims that its dealership agreements were likely to contravene section 27 of the Franchising Code of Conduct (FCC), section 51ACB of the Competition and Consumer Act (CCA) and sections 18 and 29(1)(m) of the Australian Consumer Law (ACL).

Husqvarna is a subsidiary of the Husqvarna Group, which is a global power tool manufacturer based in Sweden. Husqvarna has 343 dealers throughout Australia.

The relevant conduct

Husqvarna represented to its dealers that the dealership agreements they signed with Husqvarna were not franchise agreements. However, the ACCC considers that the dealership agreements were franchise agreements and dealers were therefore entitled to the protections contained in the FCC.

Husqvarna’s representations that the dealership agreements did not constitute franchise agreements were likely to be misleading in contravention of sections 18 and 29(1)(m) of the ACL.

Husqvarna is likely to have terminated one or more dealership agreements in breach of various clauses of the FCC, including section 27, and, in consequence, section 51ACB of the CCA.

Husqvarna’s dealership agreement also contained several clauses that were potentially unfair contract terms and therefore void under Part 2-3 of the ACL.

The undertaking

To address the ACCC’s concerns, Husqvarna provided the ACCC with a section 87B undertaking which states that, among other things, Husqvarna will:

·offer any new dealers a new agreement that complies with the FCC and does not contain unfair terms;

·provide all existing dealers a written notification, in a form approved by the ACCC, that the FCC applies to their current dealer agreement, as well as the opportunity to transition to the new agreement;

·not enforce any of the unfair terms in the old agreement;

·provide all new and existing dealers a disclosure document and any other documents required by the FCC; and

·implement and maintain an ACL compliance program for a period of 3 years.