Franchising Code $10m fines take effect
Legislation to increase fines for breaches of the Franchising Code of Conduct to $10 million or more, as well as to double fines other under industry codes took effect from September 13, according to a government website.
The Treasury Laws Amendment (2021 Measures No. 6) Bill 2021 passed both houses of parliament on September 2, and received Assent (the final stage of the legislative process) on September 13.
Franchisors now face the risk of financial penalties for Code breaches that can be the greater of $10 million, or three times the value of the benefit that caused the breach, or 10 per cent of the franchisor’s turnover for the 12 months prior to the breach. Breaches of the Code not otherwise captured by the new fines will be subject to a doubling of penalty units from 300 to 600 penalty units, which based on the current value of a penalty unit means fines of up to $133,200. Maximum penalties for individuals have also been raised to $500,000.