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The Commonwealth Ombudsman, the ACCC and Bakers Delight

In Australia the Commonwealth Ombudsman investigates complaints relating to alleged non-performance of government agencies.  In this instance the Ombudsman has received a complaint that the ACCC’s investigation into Bakers Delight [COBS in North America] was ‘flawed and lacked procedural fairness’.

The ACCC has come under constant fire from numerous franchisee networks across Australia where franchisees claim the ACCC merely pursued an appearance of an investigation and where the records indicate it rarely found issue regardless of the critical mass of complaint, evidence submitted, evidence available within the powers of the ACCC but not pursued and the constant of franchisee turnover, and more ….

There is a very real lack of legal precedent in this area and we believe that the ACCC is reticent to make a challenge for fear of losing. While this provision is available under the Trade Practices Act the ACCC has never mounted a challenge. Chalpat Sonti – Fairfax Media

Conflict between Bakers Delight and its franchisees has been raging since 2003.  The ACCC further fuelled the fire when a 2007 investigation yielded a response from the Chairman of the ACCC suggesting;

it should not be assumed that where there is smoke there is always fire. Graeme Samuel

Well known franchisor at Bakers Delight, Roger Gillespie, was seemingly not approached for comment and perhaps since routinely Mr Gillespie is never available.

Ms de Leeuw told the Ombudsman she requested copies of transcripts and documents of the ACCC investigation under Freedom of Information laws.

However, she said she was told the request would cost $150,000 ‘but was going to be refused regardless of the cost, based on the time it would take to put the request together’.

While many of the most memorable failures by the ACCC made the biggest headlines [Lenards Chicken, Kleenmaid, and Bakers Delight], there have been regular reports for many years regarding a constant flow of investigations.  These involved many franchise brands, including but not limited to those within the recent state and federal franchising inquiry submissions, and where virtually all received identical treatment.

As far as can be determined, a franchise complaint to the Commonwealth Ombudsman in relation the Australian Competition and Consumer Commission is unprecedented.

It was noted that in September 2009 the ACCC’s Bruce Cooper, General Manager, Information, Research and Analysis, spoke to the Commonwealth Ombudsman’s Conference outlining the ACCC’s enforcement priorities including;

> conduct involving national or international issues;

> conduct that is industry-wide or likely to become widespread if the ACCC does not intervene;

> whether ACCC action is likely to have a worthwhile educative or deterrent effect; and

> the person, business or industry has a history of previous breaches of trade practices law.

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About Ray Borradale

Ray Borradale's picture

Public Profile

Over forty years experience in Small Business and more than twenty-five years in franchising operations as a franchisee and employed by three franchisors, mostly in operations.

I have dedicated more than ten years and over 15,000 hours in the pursuit of quality franchising and exposing franchisor abuse of franchisees while advocating for the introduction of franchise relationship Law and the levelling of the dispute processes between bigger business and small business.

Contact: rayborradale@yahoo.com.au

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Franchise Operations