We recently represented a supplier of Pastacup in a number of successful Magistrates Court actions.
In September, the ACCC announced that it had commenced proceedings in the Federal Court against the franchisor of Pastacup and its former director, Stuart Bernstein.
The ACCC alleges that Mr Bernstein's directorship and management of two previous Pastacup franchisor companies which became insolvent should have been disclosed by the current franchisor, as part of the mandatory disclosure documents.
The Franchisor and Bernstein face penalties of up to $54,000.
This case highlights the importance of Franchisors seeking advice on the Franchising Code of Conduct, understanding their disclosure obligations and complying with them.
It also highlights the importance of Franchisees seeking advice on how to protect themselves in the event that the Franchisor becomes insolvent.
If you are a Franchisor, we can review your franchise agreement to ensure that you are complying with your disclosure obligations.
If you are a Franchisee we can ensure that you are well protected, by including a personal guarantee in the agreement, giving you the right to lodge a caveat over the property of the Director.
Contact us today.
Disclaimer: This newsletter and any information contained herein are intended for informational purposes only and should not be construed as legal advice. For any legal advice please contact us email@example.com
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