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Cleaning and Home Service Franchises Mentioned in ACCC Franchise Warning

Australia (News4us.com) July 11, 2012

Cleaning and Home Service Franchises Mentioned in ACCC Franchise Warning

Cleaning and Home Service Franchises Mentioned in ACCC Franchise Warning

In reaction to a number of complaints a new national warning has been issued by The Australian Competition and Consumer Commission.

In the glare of the ACCC spotlight this week are Australia’s Cleaning and Home Services Industry Franchises.

Franchisors in the huge home industry and cleaning sectors who allegedly provided a minimum ‘guaranteed’ income and failed to deliver were high on the complaints list.

The ACCC has therefore issued this latest warning encouraging people who are contemplating buying a franchise to carefully consider and take the appropriate steps to check and confirm all potential income claims.

In these tough economic times more and more people are daring to venture out and try this unique form of small business opportunity for the first time.

Due to their low initial investment and small learning curve, franchises in the home industry and cleaning services can be quite rewarding.

Whether through financial reasons or just chasing that age old dream of becoming independent and eventually financially secure, many Australians are taking that first step and entering into their own small business.

ACCC chairman Michael Schaper said, “The ACCC is investigating whether a number of franchisors in this industry engaged in misleading or deceptive conduct by making claims about potential earnings.”

“Franchisors must have a reasonable basis for making all income representations to potential franchisees.”

“The ACCC is particularly concerned by franchisors which appear to target people from non-English speaking backgrounds who may not fully understand the agreements they are entering into.”

Migrants were highlighted in the chairman’s statement as a number of the complaints were lodged by non-English speaking people who were perfect targets for the more unscrupulous operators in the industry.

Court enforced penalties of up to $1.1 million per dispute were also mentioned by Dr Schaper, along with:

“The ACCC strongly encourages anyone who is thinking about buying a franchise to talk to other franchisees – ask if they are earning as much as they expected.

“You should also discuss your franchise agreement with a lawyer and an accountant. If you don’t understand it, don’t sign it,” Dr Schaper said.

A free online education program funded by the ACCC and operated by Griffith University, is available to all intending franchisee’s to take advantage of and make a more informed decision.

To sign up to the program, visit www.franchise.edu.au/pre-entry-franchise-education.

For more information about the measures to adopt prior to buying a franchise, see the ACCC’s Franchisee Manual and Franchisee Start-up Checklist, located at www.accc.gov.au/franchising.

 


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