News and Events
View our large collection of articles, events, media and interviews within.
View our large collection of articles, events, media and interviews within.
Category: Legal
Franchising as a business model undoubtedly has its critics. Perhaps the most prominent is Mr I R Rau. In 2007, Mr Rau MP, a member of the Economic and Finance Committee of the Parliament of South Australia conducted an inquiry into franchising, and commented that “in a perfect world we …
Location, location, location. It’s of course as important in relation to j franchise outlets as it is in relation to real estate more generally. Location issues are key for franchisors and for individual franchisees. The quality of the location of a franchise system’s outlets is a significant factor in the …
Little comment in commercial circles has occurred in relation to the Personal Property Securities Act 2009. Some companies know in a general sense that this Act is about to come into force, but few understand the practical implications of the legislation. This may be due in part to the government’s …
Fair Work Australia upheld a decision yesterday to allow high school students who are casual employees to work a minimum of 1.5 hours on school days, rather than the 3 hour minimum which applies to retail employees. A minimum 3 hour shift for retail employees was introduced in January 2010. …
The Australian Competition and Consumer Commission v Sensalim Australia Pty Limited (Administrator Appointed) & Ors The ACCC instituted proceedings in the Federal Court against Sensaslim (the manufacturer of a weight loss nasal spray) and officers of that company alleging they engaged in misleading and deceptive conduct and made false representations. …
Mobile phone franchise Allphones has again found itself the centre of attention, but for all the wrong reasons. In a recent decision, the Federal Court fined the company $45,000 for contempt of court relating to breach of orders imposed on it in 2008. The Australian Competition and Consumer Commission (ACCC) …
For years, brand owners have been anxious and concerned about counterfeit goods being readily available on online sites such as eBay. However, a recent court decision may place an onus on eBay to prevent intellectual property infringements by its users. In 2009, L’Oreal sued eBay’s European subsidiaries for trade mark …
The success of any retail franchise is inextricably linked to the success of the lease negotiations. Rent generally constitutes the largest fixed cost in any retail business, ranging from 8 per cent of sales up to 25 per cent of sales in some cases. Given the significance of the cost impost on …
Much attention is given by Franchisors in respect to the assignment of a franchisees franchise agreement. Nearly all standard franchise agreements allow for assignment of the remaining term of the franchise agreement, subject to the franchisor’s reasonable requirements. However, some franchise agreements are less clear about the franchisor’s right to …
The Australian Competition and Consumers Commission had brought Federal court proceedings against the Jewellery Group Pty Ltd, the operator of Zamel’s jewellery stores. The ACCC claims that between November 2008 and May 2010, the Jewellery Group misrepresented the savings in price of various items of jewellery which were advertised in …
Matt Ward of Organic Marketing Australia (OMA) began using the trade mark “Honest to Goodness” in 2003 to manufacture, distribute and sell his organic and wholefoods under this name and brand. Today, Mr. Ward’s family-owned business supplies its products to about 350 specialist and independent stores all around Australia. On …
We note that many businesses are being run via a company structure without a formal shareholders agreement governing the relationship between the shareholders. A Shareholders Agreement is strongly advised in that it can deal with a range of issues which the standard company constitution may not appropriately cater for. Of …
Distinctive Trade Marks In order for a trade mark to be registered, it must be considered to be distinctive in respect of the goods/services it covers. This is because registration of a trade mark provides the trade mark owner with potentially indefinite monopoly rights in that mark. Descriptive words or …
It may come as a surprise to many franchisees that their right to operate a franchise can come to an abrupt end. Unless the right steps are taken to ensure renewal of your franchise agreement, you may find the hard work you have put in to building the business is …
Togetherness is a beautiful thing. It is indeed an essential element of a meaningful relationship. But, in the wise words of Khalil Gibran, often cited in the context of the marriage relationship: “Let there be spaces in your togetherness, and let the winds of the heavens dance between you. Love …
The power of a good brand is simply staggering. Interbrand, an international branding company, compiles annually a ranking of the best global brands. For many years Coca Cola has been ranked number one with a value of over US$70 billion. Its top ranking is nevertheless under threat from Google, a …
For the last few years, retailing pundits have constantly told us eCommerce is the wave of the future. It’s not! It’s already here and retailers who can’t, or won’t grasp that fact, risk being quickly left behind. Last year about five percent (roughly $12 billion) of retail purchases in Australia …
New consumer protection laws coming into play in 2011 mean tougher legislation for suppliers and manufacturers concerning the services, goods and warranties they offer consumers. The new legislation, which comes into effect from 1 January 2011, applies to all goods bought on or after this date; for goods and services …
Senator Nick Sherry has again announced his position in respect to the illogical attempt by the WA and SA governments to introduce legislation to govern franchisor conduct. He made it clear in his first national statement that the government does not intend to review the Franchising Code of Conduct again …
There is a misconception amongst some franchisors that they do not need to update their Disclosure Document if they are not actively recruiting. The issue with this is not so much the need to provide a current Disclosure Document to prospective franchisees, as it is to provide this to existing …
Often shareholders agreements contain complicated provisions in relation to tag-along and drag-along rights afforded to shareholders. Below is a brief explanation of those provisions: Drag-Along Drag-along clauses are designed to safeguard the interests of majority shareholder(s) by ensuring that minority shareholder(s) are not able to frustrate the sale of the …
Intellectual property is increasingly becoming hot property. According to the World Intellectual Property Organisation (WIPO), investment in intangibles already outstrips investment in the physical economy in the United States, for example. Trade mark and patent activity is often an accurate reflection of a nation’s economic health. This is because naturally, …
Those with a name such as Andrew Llewellyn Terry, respectively reflecting Scottish, Welsh and English heritage, should exercise caution in telling Irish jokes. Nevertheless, it would be a shame to allow political correctness to get in the way of a good story, particularly when the Irishman has a rare victory. …
The Trade Marks Act allows any sign, including a colour or colour scheme to be registered as a trade mark. There are currently 224 colour trade marks registered in Australia. Companies are rushing to secure their colour trade marks after the landmark decision to allow Cadbury to register five shades …
In recent times, the franchise sector has increasingly seen the appointment of Area Developers as opposed to Master Franchisees. Whilst there exist significant legal and commercial differences between a master franchisee and an area developer, there is a tendency in the franchise sector to erroneously use the terms interchangeably. They …
More people communicate, negotiate, buy and sell online today than ever before. The internet is very much a business medium. e-commerce is a multi-trillion dollar phenomenon globally and gives individuals and businesses the ability to deal and transact with others in almost any jurisdiction. Exactly how and when contracts are …
Franchisors face increasing levels of government regulation and compliance costs as the South Australian government continues to push state based legislation. Notwithstanding the recent changes to the Code earlier this year and a plethora of enquiries both on a state and federal level, franchising in Australia is still faced with …
If your accounting financial year ends on 30 June, be sure to have your updated Disclosure Document finalised before 30 October, a critical date on the Franchising calendar. Following the changes made to the Code earlier this year, some of you may have Disclosure Documents updated as at 1 July. …
Following from the recent media release concerning the liquidation of the Cookie-Man franchise, the frequently used means for recovering a debt from a company is by issuing a Statement of Claim and progressing through the legal processes of the Courts whereby a determination is made based upon the evidence submitted …
In the legal arena one of the things a new brand should be is “distinctive”. In trade mark law that word in essence means that the brand should NOT be descriptive of the goods or services to which it relates, and must be able to “distinguish” the goods or services …
Robust corporate governance should always be of paramount importance to any business. One key area of concern, no doubt more prevalent in this post-GFC economy, is that of solvency. The prudent business director should be well aware of their obligations in this regard. Directors’ duties are imposed by both common …
Technology and copyright issues for digital music are hot topics in Australia and around the world. They are a key indicator of the changes around content and intellectual property protection and management involving the internet. On 6 July 2010, the Federal Court of Australia ruled that the composers and publishers …
Shakespeare’s Juliet may have suggested that “a rose by another name would smell as sweet” but brand managers who spend billions of dollars annually in the quest for brand loyalty would disagree. Words matter. Language matters. Frank Perdue, founder of one of the largest chicken producers in the US, was …
Franchise systems, like any business, can be privately or publicly owned. Shareholders are an integral part of corporate structure in the big end of town and have flexed their muscles in the GFC, so what impact can they have on a franchisee’s own business in a public company? The company …
Ashton Kutcher is reported as commenting of his marriage to Demi Moore that “Sometimes the most illogical decisions you make in your like can be the best ones when it comes to love. In a lot of cases when you think too much about things you make the wrong decisions.” …
The Trade Practices Act (TPA) will indeed cease to exist from 31 December this year but on 1 January 2011 the Competition and Consumer Law Act (CCA) will take effect. But there is a lot more to this than simply a name change. This heading was deliberately chosen, instead of …
There has always existed an uneasy balance between shareholders’ rights and large payments to directors and executives. Recent government reform has tilted the balance towards shareholders. Shareholders and value Maximising share value is a key concern for any shareholder. Large, lump sum payments to directors and executives upon exit from …
We are frequently asked this question and our answer is always “Yes, if your company has more than one shareholder”. Constitutions set out the rules governing the general rights of shareholders such as the conduct of directors’ and shareholders’ meetings and the appointment/removal of directors. Shareholder Agreements deal with specific …
Austrade continues to support businesses expanding internationally with further grants offered for IP protection - are you eligible? As part of the 2008 legislative changes to the Export Development Market Grants (EMDG) scheme, businesses can now claim expenses under a new category Intellectual property registration and related insurance. Protecting you IP …
Leonid Ervits, Senior Solicitor at DC Strategy explains the various business structures potential franchisees may encounter when exploring business oportunities. 1. Single Company vs. Corporate Group My franchisor has a number of companies for the operation of the franchise network. Why do franchisors do this? Franchisors may choose to conduct …
Companies are often required to provide assets as security for loans and agreements through the use of fixed or floating charges. It is important to consider the implications of each type of charge. A charge is a type of security that can be taken over the property of a company. …
If your business uses standard form agreements when dealing with consumer customers, you could lose the protection of those contracts after 1 January 2010. Sweeping changes to the law will make terms of your consumer contracts unenforceable if they are considered to be “unfair”. Pretty well all sorts of contracts …
Is your prospective business purchase a franchise or a licence? John Di Natale explains why it matters and how you can scrutinise the offer What’s the difference between a franchise and a licence? On first impressions it seems there is little to distinguish the two.But the legal and commercial differences …
Businesses should take note that on 11 May 2009 important new draft unfair contracts legislation was released by the Rudd Government. The changes could mean that businesses need to change the way they contract with other businesses, clients, employees, and other parties. The criteria for determining an unfair contract The …
Current trend There has been a marked increase in the number of trade mark owners finding opportunistic third parties have used their registered trade marks as Google AdWords. There are two questions that logically flow from this predicament: Is this conduct lawful? What action can be taken to stop such …
The Franchising Code of Conduct regulates a sector now worth $128 billion to the Australian economy. The collapse of the Kleenmaid franchise and evidence of non-compliance have fuelled great debate within the sector, heralding calls for reform. The government is now under pressure to respond. In December last year the …
Franchisors face increasing levels of government regulation and compliance costs if the proposals in a recent Federal Government discussion paper become law. The Council of Australian Governments has agreed to work towards establishing new national consumer laws. If enacted, this proposal would replace various state legislation and redefine some small …
Businesses contemplating mergers or acquisitions should consider the new, more stringent rules adopted by the ACCC regarding notification. Background The current economic downturn has seen a slow down in the rate and value of mergers and acquisitions. A year ago activity was strong and showed no apparent sign of weakening. …
Businesses may unknowingly be engaged in cartel activity, as many everyday situations could potentially breach the cartel provisions of the Trade Practices Act 1974 (the TPA). A cartel is an anti-competitive arrangement between two or more businesses, which includes international agreements. This type of anti-competitive arrangement can take many forms, …
I have entered into a sale of business agreement for an existing franchise only to find out after agreeing to the purchase that there is no guarantee that the lessor will provide the franchisor with a new lease. Can I terminate the contract? Statistically the average tenure of a franchise …
I’m looking to buy a franchise and received the disclosure document and franchise agreement … what do I do now? Many individuals view franchising as a quick and easy way to start their own business. However, the purchase of a franchise consumes a substantial sum of your money and provides …
Planning on selling a franchise business requires attention and consideration of the franchisee’s obligations under the franchise agreement. In most cases the franchisee has an obligation to the franchisor in respect to the sale and exit from the franchise system. What are some of the obligations that a franchisee may …
It is through franchising that some of the world’s largest and best-known brands have achieved international expansion. Such expansion is generally attributed to master franchising. If a franchise is expanding via master franchisees, it means they’ve contracted with a person or entity to provide services to franchisees in a specified …
Company Names or Business Names … do they give you better protection than a trademark? As a commercial and franchise lawyer I am constantly advising clients of the invaluable differences between registration of a Company Name or Business Name and the registration of a Trade Mark (word mark). It …
Franchisees purchase a franchise based on the brand, system, intellectual property and or product or service, which it delivers. What is the “Brand” and why is it that franchisees pay significantly for it? What’s a brand name? Though a product or service is the core of a business the brand …
The Trade Mark Act allows colours to be registered as trade marks. However, it is evident from recent court decisions that protection of a colour trade mark is not automatic. Prior use of the colour and how consumers recognise those colours are matters which are taken into account by the …
Unconscionable conduct deals with harsh and oppressive conduct in business transactions. Generally defined, it is conduct which is so unreasonable that it goes against good conscience. The Trade Practices Act prohibits unconscionable conduct in relation to conduct directed towards small business under section 51AC of the Act. In determining whether …
