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Negligence may be a ground for a claim in breach of contract. This is no less true for parties who have entered into a franchise agreement. Each party will have certain duties and responsibilities to the other respective party, and there will be a legitimate expectation that these responsibilities will be discharged where and when they fall due. For example, the terms of a franchise agreement may require a franchisor to train, supervise or provide support to the franchisee. If this training, supervision or support is substandard, that could constitute a breach of contract giving rise to the ordinary remedies under contract law.

One of the objectives of the Franchise Council of Australia is to “establish standards of international best practice in business format franchising for Australian franchise systems” and from these, the requisite standard of care can be ascertained in any claims for negligence. [1] The Trade Practices (Industry Codes – Franchising) Regulations 1998 contains the provisions of the Franchising Code of Conduct in its Schedule. This Code is passed under Rule 3 of the Regulations, and is a very lengthy document. The Australian Competition and Consumer Commission have produced a document which is intended among other things to assist franchisers to comply with their obligations under the Code. [2] Because of the voluminous nature of these documents, ACCC has also produced a Guide which intended to help those who are interested in becoming involved in a franchise agreement navigate their way through its compliance issues. [3]

These are complex matters and it is advisable that an individual who may be involved in a negligence claim in the franchising area obtain legal advice from an experienced practitioner before taking any steps to progress his matter. For more information, see our section on “Franchises” and “Contract disputes”.

If you require assistance with a franchisors’ negligence matter you may wish to contact our firm by telephone on (02) 9233 4048 or email us at info@navado.com.au and make an appointment to see one of our solicitors.

 

[1] “About Us” Franchise Council of Australia website (updated 21 January 2013) <www.franchise.org.au> (accessed 18 November 2013).

[2] Franchising Code of Conduct Compliance Manual (ACCC, 2008; updated 2011).

[3] The Franchisees Guide to the Franchising Code of Conduct (ACCC, undated).

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