Bob Jane Corporation Pty Ltd (Bob Jane) has given the ACCC a court-enforceable undertaking to comply with its obligations under the Franchising Code of Conduct in relation to renewal and extension of franchising agreements.

The ACCC was concerned that Bob Jane failed to comply with its obligations under the Code relating to end of term and renewal of agreements. In particular, Bob Jane failed to notify some franchisees whether it intended to renew or extend their franchise agreements at least six months before the expiry of their agreements.

The ACCC was also concerned that it extended the term of certain franchise agreements without first providing required documentation to franchisees and obtaining a written statement that the franchisees had received, read and had an opportunity to understand certain documentation.

“Under the Franchising Code, franchisors must notify franchisees in writing whether they intend to extend or renew the agreement prior to the expiry of the agreement,” ACCC Deputy Chair Mick Keogh said.

“This is an important obligation as it allows franchisees to make informed decisions about the future direction of their business.”

“Franchisors must ensure they comply with their obligations under the Code. We took this action because we were concerned that Bob Jane failed to meet a number of its obligations,” Mr Keogh said.

Bob Jane has acknowledged that its conduct was likely to have contravened the Franchising Code of Conduct and section 51ACB of the Competition and Consumer Act 2010. 

As part of the undertaking, Bob Jane has agreed not to terminate any franchise agreements operating under interim arrangements without providing six months’ written notice.

As required by the Code, it will also obtain written notice from franchisees that they have received, read and had a reasonable opportunity to understand disclosure documents and the Code before entering into, renewing, transferring or extending the term or scope of franchise agreements.

Bob Jane has also undertaken to implement and maintain a compliance program for three years.

“Ensuring small businesses receive the protections of competition and consumer laws, with a focus on the Franchising Code, is a current compliance and enforcement priority for the ACCC,” Mr Keogh said. 

“Franchisors often have a stronger bargaining position in their dealings with franchisees, and we will continue to investigate and take action against franchisors where we believe there has been a potential breach of the Code.”

A copy of the undertaking can be found at Bob Jane Corporation Pty Ltd.

Background

Bob Jane, trading as Bob Jane T-Marts, operates a national network of franchised and company-owned tyre retail stores supplying tyres for a wide range of vehicles, and tyre and car maintenance-related services.

The Franchising Code of Conduct is a mandatory industry code across Australia that regulates the conduct of franchising participants towards each other. The ACCC regulates the Code and investigates alleged breaches.

In 2019, a Franchising Taskforce was established to provide advice to the Government to inform the Government’s response to the recommendations made to the Parliamentary Joint Committee Inquiry into franchising. 

On 11 November 2019, the Taskforce released a Consultation Regulation Impact Statement (RIS) for public consultation setting out identified problems with the franchising sector and possible options for government action.

The ACCC’s submission outlines the ACCC’s view that serious consideration should be given to a different regulatory model to address the fundamental concerns that persist in the franchising sector, rather than the incremental changes to the Code currently being considered by the Franchising Taskforce.

The ACCC’s submission in response the RIS can be found on the Department of Industry, Science, Energy and Resources website.

More information for the franchising sector can be found on the ACCC’s website.

Nearly 200,000 vehicles fitted with potentially deadly airbags are still on the roads, and more than 8,000 of these are considered so dangerous they should not be driven at all, according to the latest ACCC figures on the compulsory recall of Takata airbags.

In addition, a significant number of vehicles fitted with a different type of faulty Takata airbag are yet to be remedied. These vehicles, which are fitted with Takata NADI airbags, are considered so dangerous that manufacturers are offering to buy back the vehicles or to provide a loan vehicle until replacement parts are available. We are aware that there have been two deaths and two injuries in Australia resulting from misdeployments of Takata NADI airbags. 

Motorists are being urged to check now if their vehicles are fitted with these recalled Takata airbags, as car dealerships are still operating and providing replacement airbags free of charge. 

“Even during this pandemic, replacing faulty airbags is an essential and potentially life-saving task, especially as vehicles may be being used by essential workers and care-givers,” ACCC Deputy Chair Delia Rickard said.

“It will also be more important than ever that as more people start to use their cars again, they check that their airbags are safe. Affected Takata airbags can misdeploy and send sharp metal fragments into the vehicle at high speed, and cause serious injury or death to its occupants.”

“Drivers should check online or with their dealer or manufacturer whether their vehicles are subject to this compulsory recall or the voluntary recall of Takata NADI airbags, and never ignore a notice of recall from your car’s manufacturer,” Ms Rickard said.

Globally there have been 29 deaths and over 320 serious injuries reported, including one death and one serious injury in Australia relating to airbags affected by the compulsory recall.

Over four million airbags in more than three million vehicles in Australia were originally affected by the Takata compulsory recall due to these potentially deadly airbags.

More than 88 per cent of airbags have now been rectified, and about six per cent have been reported by suppliers as written-off, stolen, unregistered, exported or modified and unable to be replaced.

Figures from the ACCC’s latest quarterly update on the compulsory recall show that about five per cent (over 228,000) of faulty airbags remain in more than 196,000 vehicles.

In particular, motorists are in danger if they have a critical vehicle containing an airbag that poses a heightened risk of causing injury or death. There still more than 8,000 of these vehicles remaining on the roads, and drivers can check the Product Safety Australia website if their vehicle is affected.

“Vehicles with critical airbags should not be driven. Please contact your dealer to arrange for your vehicle to be towed to the place of repair free of charge so you do not have to drive it,” Ms Rickard said.

The ACCC is also conscious of the impact COVID-19 is having on Australian consumers and businesses.

“We understand dealerships are still operating and are offering the services outlined in the compulsory and voluntary recall notices. Both the ACCC and the Department of Infrastructure, Transport, Regional Development and Communications will be closely monitoring any changes to these arrangements,” Ms Rickard said.

Consumers can also search for vehicles affected by the Takata compulsory recall by entering their number plate and state or territory at: IsMyAirbagSafe.com.au or by texting 'Takata' to 0487 AIRBAG (247224).

A list of vehicle manufacturer helplines and contact details is available at: Vehicle manufacturer helplines & contact details.

Takata fast facts

• In total about 3.62 million airbag inflators (88.1%) have now been rectified in about 2.64 million vehicles.
• This excludes 259,025 airbag inflators (6.3%) in 216,138 vehicles reported by suppliers as unrepairable (written off, scrapped, stolen, or modified and unable to have the airbag replaced). 
• There remains 228,764 airbag inflators (5.6%) in 196,299 vehicles outstanding for replacement.
• As at 31 March 2020, there are 1,895 vehicles with critical-alpha airbags and 6,471 vehicles with critical non-alpha airbags outstanding for replacement.
• Vehicles with critical airbags should not be driven, and drivers are entitled to have their vehicles towed to the dealership to have the airbag replaced for free. 

Notes to editors:

• The Takata airbag recall is the world’s largest automotive recall, affecting an estimated 100 million vehicles globally.
• It is the most significant compulsory recall in Australia’s history, with over four million affected Takata airbag inflators and involving more than three million vehicle recalls.
• Takata airbags affected by the compulsory recall use a chemical called phase-stabilised ammonium nitrate (PSAN). The ACCC’s investigation concluded that certain types of Takata PSAN airbags have a design defect. The defect may cause the airbag to deploy with too much explosive force so that sharp metal fragments shoot out and hit vehicle occupants, potentially injuring or killing them.
• In addition to the compulsory recall of vehicles fitted with Takata PSAN airbags, eight vehicle manufacturers have also issued voluntary recalls for some vehicles manufactured between 1996 and 2000, which may have been fitted with a different type of faulty Takata airbag, being a NADI airbag.