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I took out a franchise 4 years ago after looking a series of

 
Sydney-Lawyer's Avatar
  • Answered by:Sydney-Lawyer
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I took out a franchise 4 years ago after looking a series of ads which showed several stores have been sold and that I need to act quickly to secure this new restaurant business. I found out later on that many of the stores were in fact not sold and it was just a ploy to get me in. The ads also advertised that 'No experience is necessary' when in fact I found out that you need a lot of experience to run a big 200 seat restaurant. The ads also clearly stated that 'No chefs required' when in fact qualified chefs are required to run the kitchen and also to get an apprentice chef, cook or even a kitchen hand. When I questioned the mater franchisee about this he just said he had no problems at all with his ads. Can ads like that be classified as misleading and is there any recourse for the victims? I have brought the matter up with the ACCC but they are of the view that because the ads only affect a very tiny segment of the community (meaning me and a couple of others) they are not willing to take any action due to 'financial consideration'. What do you think?

 

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State/Territory: wa

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I have brought the matter up with the ACCC but they are reluctantly to pursue the matter due to budget constraint and because it only affect a tiny portion of the community. I have spoken to a lawyer about this but he won't commit himslef unless I can prove that I got enough money in my bank account to take the case.

Submitted: 349 days and 5 hours ago.
Category: Australia Law
Value: AU$69
Status: CLOSED
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Expert:  Sydney-Lawyer replied349 days and 5 hours ago.

Good Afternoon,


It appears that the advertising may be misleading and deceptive and therefore they had franchisor can be held liable for this type of behaviour.

It is the ACCC that deals with this, and they will investigate and if need be fine the franchisor for their actions.

In relation to what actions you can take I would need to know are you currently still working the franchise?

If not what was the result and how much money did you lose because of their false and misleading conduct?

Customer replied349 days and 5 hours ago.

The master franchisee took control of the business after I was late in paying them the 10% service fee because the business was losing money. They had been runing the business for close to 3 years in spite of the business being insolvent and had accumulated a lot of ATO debt. I have tried to sell the business as advised by them but could not get any buyer because it is a fanchise and also the figures are bad. Now I am facing the prospect of losing my house and facing liquidation. Even without the ATO debt I have lost close to $800,000.00. Are there lawyers who are willing to take up my case on a no win no fee basis? I am desperate and I don't have much money on me.

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Expert:  Sydney-Lawyer replied349 days and 5 hours ago.

Good Afternoon


Many of the Solicitors that do the no win no fee actions deal with insurers.

There may be firms out there that are prepared to do it this way if they accept and believe that they can win against the Franchisor.

You will need to Speak to the Law Society of WA and get a referral to a Solicitor that deals with Trade Practices Law and in particular Misleading and Deceptive Conduct.

You will need to provide them with copies of the advertisements that you relied on for them to be able to advise you in more detail.

You will also need to provide them with the Franchise Agreement that you signed.

Here is some information from the ACCC about what is Misleading and Deceptive conduct.

http://www.accc.gov.au/content/index.phtml/itemId/815335/

The website of the Law Society of WA is on the following link

http://www.lawsocietywa.asn.au/

I hope this is of assistance. If you have any further questions please do not hesitate to contact me.

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Expert TypeSolicitor
Category: Australia Law
Pos. Feedback: 96.2 %
Accepts: 17187
Answered: 7/5/2012

Experience: BEc Dip Ed, Dip Law (SAB) MTax (UNSW)

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