Ultra Tune Australia comes under ACCC spotlight

The Australian consumer watchdog is taking automotive repair business Ultra Tune to court over alleged breaches of the Franchising Code and Australian Consumer Law.

In its submission, the Australian Competition and Consumer Commission (ACCC) alleges in 2015, Ultra Tune “failed to act in good faith” in its dealing with a prospective franchisee, and failed to provide the same party with requisite documents under the Franchising Code. In addition, the ACCC claims Ultra Tune “made false or misleading representations about the franchise site”, in breach of Australian Consumer Law (ACL).

The automotive repair business also faces allegations of failing to provide marketing fund financial statements and audit reports to its franchisees for three financial years.

“Franchisees need accurate and timely information to help them make informed business decisions,” ACCC deputy chair Dr Michael Schaper said.

“For this reason, the Franchising Code requires franchisors to provide disclosure documents before accepting non-refundable payments from prospective franchisees, and to provide annual financial statements detailing receipts and expenses for any marketing fund to which franchisees are required to contribute,” Dr Schaper added.

The ACCC is seeking a refund of the prospective franchisee’s payment, declarations, injunctions, pecuniary penalties, compliance and adverse publicity orders.

A hearing in the Federal Court is due to be held on June 16.