ACCC launches fresh action against Allphones

Stuart Corner
Tuesday, 18 August 2009 09:51

IT Industry - Strategy

The ACCC further alleges that Allphones' conduct was unconscionable in that it made unilateral deductions from commission payments payable to franchisees, in breach of their franchise agreements. The ACCC is seeking damages for resulting losses sustained by the franchisees.

In its earlier action against Allphones the ACCC alleged that Allphones controlled the distribution of all products and income to franchisees and negotiated agreements with third parties on franchisees' behalf. It also alleged that Allphones implemented policies targeting classes of franchisees; forced franchisees to acquiesce to Allphones' will by threatening or engaging in a pattern of harsh conduct, and failed to disclose or pay certain income to franchisees; behaviours that were all unconscionable within the meaning of s51AC of the Trade Practices Act.

In its October proceedings, the ACCC alleged that Allphones had sent a position paper to its franchisees which was misleading or deceptive, and that it had committed new breaches of the Franchising Code by refusing to allow franchisees to sell their business when, the ACCC alleged, it was not entitled to withhold this consent.

According to Allphones' web site "Allphones business has been built on integrity, forward planning and financial success...Allphones and its franchisees have prospered. Many Allphones store owners have built their financial freedom and security around the profits of their Allphones franchise. We are very proud that our business has had such a positive effect on the lives of our business partners."

Allphones chairman, Tony Mitchell, was a member of the Rudd Government's FTTN expert panel set up to advise on the first NBN proposal.