As a franchisor it is one thing to ensure that the information
you provide in your Disclosure Document is accurate; but it's
another to ensure that what you and your staff say in an effort to
attract prospective franchisees does not in any way induce a
prospective franchisee to enter into a franchise agreement
especially when there are no reasonable grounds for saying what is
said.
A successful appeal by franchisees against franchisor Billy
Baxters (Franchising) Pty Ltd in the Victorian Supreme Court of
Appeal has highlighted the risks to franchisors when negotiating
and promoting Greenfield sites to prospective franchisees.
Judgement in the Victorian Supreme Court
The original judgement1 found in favour of the
franchisor. Representations made by the franchisor's
representative, Mr Mauviel, regarding the expected revenue to be
had by the franchisee if they were to establish a brand new Billy
Baxters restaurant at the Greenfield site at Glenelg were held not
to
