International Law

Bakers Delight franchise off the ACCC hook -

The Australian Competition and Consumer Commission announced yesterday that it had concluded its investigations into allegations that Bakers Delight engaged in misleading and deceptive and unconscionable conduct towards franchisees in operating its franchise system.

Jaqui Walker reports that

"However, the ACCC is holding "continuing discussions with Bakers Delight with a view to ensuring its trade practices law compliance procedures and complaint handling processes are best placed to deal with issues that might arise in the future".

A number of franchisees had alleged Bakers Delight had been churning (selling franchises destined to fail and then reselling them to others) and collusion with banks, including that Bakers Delight shared information about a franchisee with a bank which led to losses being suffered. "

Here is what the Australian Competition and Consumer Commission stated in their own press release:

Having conducted an in-depth investigation, including analysing a large amount of documentary evidence and conducting a number of detailed interviews with various witnesses the ACCC has decided not to take any further action. This position has been informed by a number of conclusions:

* the evidence assessed - in the ACCC's view - did not demonstrate that Bakers Delight had engaged in unconscionable conduct or breached the Franchising Code.

* although there is no suggestion that the allegations made by the franchisees were made with any improper intent, in many cases, it was difficult to substantiate claims and in some cases information given was directly contradicted by documents and other evidence.

* there were a few circumstances where franchisees alleged that Bakers Delight representatives had made misleading verbal representations which investigations have neither substantiated nor dismissed. However in each of these cases, the ACCC considers steps taken by Bakers Delight to remedy the alleged wrongdoing were reasonable or other factors led to the losses suffered by the franchisees.

* there was no evidence produced to or obtained by the ACCC that - in its view - evidenced widespread or systematic problem of compliance within the Bakers Delight franchise system.

For an alternative view, please see the website Baker's Delight Lies.

Full post as published by Misleading Advertising Law on April 23, 2008 (boomark / email).