The Franchise Council of Australia has asked the regulator to investigate troubled franchise Jump! Swim Schools after a rising number of complaints.
The franchise body said its chief executive Mary Aldred had written to the Australian Competition and Consumer Commission "advising of concerns that there may have been breaches of the Franchising Code and recommending that the regulator investigate the matter".
Juliet Sharpe is one of the franchisees in dispute with Jump!Credit:Steven Siewert
Potential breaches of the Franchising Code
Jump! is not a member of the industry body and so the recourse available to the FCA is limited.
However, the FCA spokesperson said poor behaviour by franchisors affects all franchises, regardless of whether they are members of the industry body.
Mary Aldred, chief executive of the Franchise Council of Australia, has asked the ACCC to investigate Jump! Credit:Louie Douvis
"The FCA has zero tolerance for non-compliance or poor behaviour by any franchisor or franchisee, whether a member or not of the FCA."
The spokesperson said Jump! franchisees should contact the FCA for advice on how to lodge an application with the regulator to resolve their issues.
Franchisees still waiting
Jump! has been under pressure following revelations by The Age and The Sydney Morning Herald that franchisees have paid hundreds of thousands of dollars for the construction of swim schools but are still waiting for the build to start up to two years later.
Construction contractors in Western Australia, Victoria and Queensland have also experienced difficulties getting paid by Jump!.
Jump! franchisee Juliet Sharpe first spoke out about the swim school in January and despite paying $165,000 for a franchise two years ago plus more than $100,000 in rent, she is still no closer to opening her swim school.
Sharpe and other franchisees are concerned Jump! is still trying to sell franchises, including opening new schools in the United States, when it hasn't followed through with the franchisees it has already signed up.
Posts on Facebook by Jump! Swim Schools USA last week say "opening in March, Jump Swim Schools Shreveport, will be our very first opening in the US".
"They are still out selling franchises when they can't open the ones they have," Sharpe says.
Jump! was contacted for comment.
A spokesperson for the ACCC said the watchdog could not provide information about complaints or potential investigations.
However, the ACCC has been vigorously pursuing franchisors, announcing on Monday a win in the Federal Court over former hand car wash and detailing franchisor Geowash for acting unconscionably towards franchisees.
In a decision handed down on February 8, the court found Geowash had made false or misleading representations on its website by suggesting prospective franchisees could make monthly average revenue of $70,216, when it had no reasonable basis for this claim, and representing that it had a commercial relationship or affiliation with major corporate entities including Nissan, Kia, Renault, Audi, Emirates, Shell, Hertz, Holden, Ikea and Thrifty, when it did not.
This follows the ACCC's prosecution of the Ultra Tune franchise in January which resulted in a $2.6 million penalty for breaching franchising and consumer laws.
The litigation comes as the franchise sector waits for the final report of parliament’s inquiry into franchising which is expected to be released on Thursday.
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