Domino’s Pizza gets sliced for breaching franchising code of conduct
The pizza chain allegedly failed to disclose fund activities.
Australia's competition regulator issued Domino's Pizza two infringement notices after it was alleged the popular pizza company had failed to provide franchisees an annual marketing fund financial statement or an auditor's report within the appropriate time frame specified in the Franchising Code of Conduct.
This is the first recorded instance of a company being penalised for a breach of the code.
The Code of Conduct requires franchisors to prepare annual financial statements for franchisees, disclosing marketing fund receipts and expenses, within four months of the financial year ending.
These funds must also be audited (unless 75% of franchisees agree otherwise) and an auditor's report must be distributed to franchisees within 30 days of the report being prepared.
Domino's told the Australian Competition and Consumer Commission (ACCC) that it had provided the 2015/16 marketing fund statement and auditor's report to franchisees in late February. However, this was outside the limited time frame set out in the code. Domino's paid the ACCC $18,000 in penalties.
Late last month the ACCC revealed it will be taking milk processing co-op Murray Goulburn to court over alleged false representations it made to Southern Milk Region dairy farmers regarding pricing forecasts.