The Australian Small Business and Family Enterprise Ombudsman Kate Carnell has welcomed a Federal Court ruling that Megasave Couriers Australia Pty Ltd (Megasave) misled prospective franchisees.
Ms Carnell applauded the ACCC for taking action against Megasave, following a number of franchisee complaints to the Ombudsman’s office.
“I congratulate the ACCC for bringing proceedings against Megasave,” Ms Carnell says.
“This action taken by the regulator has resulted in the Federal Court’s judgement that Megasave breached Australian Consumer Law as well as the disqualification of Megasave’s sole director Gary Bourne from managing a corporation for five years.
“This outcome will be welcomed by the impacted franchisees who have suffered significant financial hardship and distress due to Megasave’s failure to fulfil its promises.
“More than 30 franchisees approached my office for assistance in late 2019, having spent as much as $27,500 to buy into the Megasave franchise.
“The franchisees raised a number of concerns including Megasave’s failure to pay guaranteed minimum weekly payments of around $2,000.
“My office provided dispute resolution assistance to the franchisees under the Franchise Code of Conduct, including facilitating a group mediation.
“Aspects of the matter were referred by my office to the ACCC for its consideration and we assisted with the ACCC’s investigation.
“I encourage franchisees who believe they have been misled by a franchisor or in a franchise dispute to contact my office for assistance.”
Penalties and compensation for the affected Megasave franchisees is expected to be determined in a hearing next month.