Maddens Lawyers

Focus on franchising

What issues should a franchisee consider?

Franchise Agreements are regulated by the Competition and Consumer (Industry Codes – Franchising) Regulation 2014 (the Code). Before entering into a franchising agreement, franchisees should consider the following:

  1. Franchisors must give franchisees a disclosure statement together with a copy of the proposed franchise agreement before entering into a franchise agreement. It is essential that you read the franchise agreement and obtain legal advice before you sign the franchise agreement.
  2. A franchisee is entitled to a cooling off period of seven days after entering into a new franchise agreement, however, this right does not apply to the renewal, extension or transfer of an existing franchise agreement.
  3. Franchisees should consider whether their rights are limited to a particular territory. If so, is the territory adequately defined; has a territory plan been attached? Do reciprocal referrals apply? For example, is the franchisee required to refer customer contacts made from outside their territory to other franshisees and vice versa? Is a commission paid for the referral?
  4. Franchisees should understand and consider whether they have exclusive rights within the territory. Is the franchisor or other franchisees allowed to compete with the franchisee in the territory?
  5. The Code requires that both franchisors and franchisees act in good faith. That is, the parties must act reasonably in pre-contractual negotiations, during the performance of the franchise agreement, dispute resolution and in the ending of the franchise agreement.
  6. You should consider where you will conduct the business from (ie. from a site owned/controlled/leased by the franchisor or a site to be leased from a third party). Careful consideration should be given to the provisions of the lease. In particular, the term of the lease should coincide with the franchise agreement and you should ensure that there is an ability to terminate the lease in the event that the franchise agreement comes to an end. You should also consider if (and how often) a new fit-out will be required and whether the landlord will allow such modifications?
  7. You should consider where you will source stock/ingredients from. Is the franchisor required to provide the product or will you engage a third party supplier? Where a third party is engaged, any agreement with the third party should be on terms the same or similar to the franchise agreement. Ideally, the third party supply agreement would allow for termination in the event the franchise agreement comes to an end.
  8. Who owns the intellectual property the subject of the franchise? If it is not owned by the franchisor, then you should investigate their rights to use that intellectual property and you should revise the Head Licence to ensure that the franchisor’s right to use intellectual property rights will be available throughout the duration of the franchise? Is the intellectual property attached to the franchise unique or is the franchise offering easily replicated/duplicated by others? What are the benefits of the proposed franchise model?
  9. What royalties and other fees and charges will be payable during the term of the franchise agreement? Are they reasonable? Are they subject to variation? How will marketing fees be applied? To local or national campaigns?
  10. Is the franchise agreement transferable? If so, what steps or payments are required to transfer or assign the franchise?
  11. Is on-going training and support offered or expected? Are there fees attached to additional training? Will training be offered locally? Is there support for dealing with customer warranties and disputes/refunds?
  12. Will you be subject to a restraint of trade upon ceasing the franchise? Do the terms of the restraint comply with the Code?

Maddens Lawyers announces investigation into class action against Ford and Mazda

Maddens Lawyers is offering to assist purchasers of Ford Ranger vehicles built after July 2016, and Mazda BT-50 vehicles built since June 2016 following safety recalls from both manufacturers.

These vehicles are seriously compromised by a design fault where the DPF (diesel particulate filter), which forms part of the emission control system, develops extremely high temperatures and creates a real risk of ignition of fires when driven over dry grass or other dry fuel. There have been numerous reported incidents of fires.

It is understood that the recall will commence in or about March 2018, and that the manufacturers are at present developing parts to rectify this very serious problem.

Maddens Lawyers Class Action Principal, Mr Brendan Pendergast, said that there is no certainty as to whether the recall will satisfactorily resolve the immediate risk.

“There are a number of issues of concern to purchasers of these vehicles. Not only it is yet to be determined if the newly developed parts will work safely, but also the impact on resale market value of affected cars, and the current driving limitations of these vehicles,” Mr Pendergast said.

There have been 59,000 sales of the Ford range and 17,000 of the Mazda to date. Given such a large number of people, Maddens Lawyers believe a class action is the appropriate channel for obtaining proper compensation for affected purchasers.

To stay informed of developments regarding the investigation and compensation opportunities, owners of affected vehicles can register their details now at www.maddenslawyers.com.au/fordmazdasafetyrecall

Registering is not a commitment to take legal action.

Claims for compensation to be advanced following last weekend’s widespread power outages

Maddens Lawyers is offering to assist business owners and households that were substantially impacted by Victoria’s 28 January blackout to advance compensation claims for losses incurred as a result of the prolonged outage events.

Outages effected approximately 95,000 customers throughout Victoria during extreme heat conditions on Sunday 28 January and Monday 29 January. Customers serviced by electricity distributors United Energy, Powercor and CitiPower were the worst affected.

Mr Brendan Pendergast, Maddens Lawyers Class Action Principal, said that there was no guarantee that the widespread faults that occurred last weekend would not happen again. “Customers are vindicated in their concerns about the reliability of the electrical network,” he said.

CitiPower, Powercor and United Energy have attributed the blackouts to a number of fuse faults across their networks. CitiPower and Powercor have also advised that an outage in the Bellarine Peninsula area, which impacted approximately 17,500 customers, was the result of an incident with two cables at a zone substation.

Mr Pendergast said that the widespread outages adversely impacted thousands of business and households. A number of businesses were forced to close their doors and send staff home. They have also incurred expenses in replacing refrigerated stock and produce which had to be thrown out during the outage.

“Customers reasonably expected their electricity distributor to operate and maintain a network which is capable of providing them with a reliable supply of energy, particularly during challenging weather conditions. Initial reports indicate that minimum service levels and standards were not met over the weekend,” Mr Pendergast said.

“Energy bills have been increasing at a rapid rate and ‘network costs’ are the largest component of those bills. Collectively, consumers are paying millions of dollars each year to ensure that the network serving their area is, safe, reliable and able to withstand an Australian summer’s day. The performance of the electricity network on 28 and 29 January fell short customer’s expectations,” Mr Pendergast said.

Those that suffered substantial losses as a result of the blackout are encouraged to contact Maddens by registering online at www.maddenslawyers.com.au/poweroutage

The cause of each of the faults will continue to be investigated by the relevant electricity distributors, in conjunction with the Australian Energy Regulator.

Landowners impacted by Inland Rail urged to register for compensation assistance

Landowners expected to lose land to the Brisbane to Melbourne Inland Rail Project (Inland Rail Project) are being urged to seek legal advice without delay to ensure they receive their full entitlements to compensation for the loss of their land.

This advice comes following the Australian Rail Track Corporation’s recent announcement that the land to be acquired as part of the Narromine to Narrabri (‘N2N’) section of the Inland Rail Project has been largely identified, which means landowners between Narromine and Narrabri are now likely to be aware if they will be directly affected.

Maddens Lawyers has been closely monitoring the developments of the Inland Rail Project, which includes the upgrade of existing tracks as well as construction of a number of sections of new track.

Many rural and regional landowners positioned on, or adjacent to, the new sections of track will have their land compulsorily acquired by the New South Wales (NSW) Government and Queensland (QLD) Government.

The Australian Rail Track Corporation, overseen by the Federal Government, has estimated that 1,000 to 1,100 property acquisitions will be required to complete the Inland Rail Project. Properties impacted are located in NSW and QLD and range from large rural properties to residential areas of regional towns.

Mr Brendan Pendergast, Principal of Maddens Lawyers said that property owners often misunderstand and underestimate the financial impacts associated with the compulsory acquisition of their land, and the heads of loss they are entitled to recover.

“Valuation fees, stamp duty and conveyancing costs, loss of use of the land, relocation costs, consequential financial losses and solatium or non-financial disadvantage are some of the impacts for which compensation is recoverable.

“This is why we recommend landowners seek advice from an experienced lawyer so that they ensure they secure the full measure of compensation to which they are entitled to by law.

“The financial offers put to landowners for property acquisition are commonly on the lower end of the scale, and not necessarily in their best interest. When they know their rights based on expert legal advice, they will have an understanding of the full extent of compensation they are entitled to. The construction of claims for full compensation can be complex and is best handled by a competent and experienced legal advisor,” Mr Pendergast said.

Maddens is offering to assist landowners in advancing claims for compensation associated with the compulsory acquisition of their land at no cost to them.

Maddens Lawyers has significant experience in representing large groups in rural settings having successfully represented many hundreds of victims of bushfires across regional and outer urban areas of Victoria and New South Wales since 1983.

Those likely to be impacted by the Inland Rail Project are encouraged to contact Maddens Lawyers on 1800 815 228 or register online at www.maddenslawyers.com.au/inlandrail

By registering, landholders will receive regular updates and will be able to access the services and advice offered by Maddens Lawyers.

Katherine PFAS compensation claims to progress case by case

Following ongoing investigations and consideration of the circumstances of the PFAS contamination in Katherine, Maddens Lawyers will progress claims for compensation against the Department of Defence on a case by case basis.

Maddens Commercial Litigation Principal, Brendan Pendergast, advised that the impact of the PFAS contamination in Katherine has been varied.

“The consequences of PFAS contamination differ between businesses and individuals depending upon the way in which the land is used. Residents who have registered with Maddens are reporting a diverse range of concerns. Progressing claims on an individual basis will ensure that each claim for compensation is comprehensive and constructed to each individual’s particular loss and damage,” explained Mr Pendergast.

Maddens Lawyers will advance claims against the Department on a ‘no win, no fee’ basis,’ and will work with clients to ensure that claims for compensation incorporate all legal entitlements.

“Often people are unaware of the full extent of their claim until they discuss their circumstances with us,” Mr Pendergast said.

Maddens Lawyers are well placed to progress claims on an individual basis against the Department having undertaken a similar process on behalf of property owners impacted by the 2013 Lithgow bushfire in NSW. Maddens Lawyers understand that the Department is prepared to consider individual claims for compensation arising from the activities at the air force base.
Mr Pendergast believes there are benefits of progressing claims on an individual basis in this instance including the provision of targeted advice and the likelihood of achieving a timely outcome for those persons whose properties have been directly affected.

“These individuals will have the opportunity to have their claims dealt with efficiently and without the potential delays associated with a class action, which might include more remote and difficult claims.

“In the event that claims are resolved as proposed, any settlement would also require the Department to make provision for the individual claimants’ legal costs,” Mr Pendergast said.

Maddens are presently focusing on compensation claims on behalf of those whose primary water supply is from a private bore or ground water.

“We are aware of many smaller landholdings and dwellings located outside the township of Katherine and close to the air force base which have been significantly and directly impacted. In those instances, we believe an individual case by case approach is likely to be a quicker process and more likely to lead to recovery of all compensable losses for each individual,” Mr Pendergast said.

To enquire about progressing a claim for compensation phone Maddens Lawyers on 1800 815 228 or email katherine@maddenslawyers.com.au