ACCC warns franchisees on income promises
16 Jul 2012
The competition watchdog is warning potential franchise buyers to scrutinise claims made by vendors about the income they can earn – particularly in the fast-growing cleaning and home services industries.
The Australian Competition and Consumer Commission (ACCC) is investigating whether franchisors have engaged in misleading or deceptive conduct by making claims about the potential earnings for franchisees.
Acting ACCC chairman Michael Schaper said people considering investing in a franchise business needed to be wary of “get rich quick” schemes.
“Franchisors must have a reasonable basis for making all income representations to potential franchisees,” he said.
Dr Schaper said people are at risk by buying a franchise on the basis of an attractive promised income,….”