The Federal Court has imposed a $2.6 million penalty on Ultra Tune for false and misleading statements made to a prospective franchisee about the franchise price, the rent of the relevant premises, the age of the franchise and that a $33,000 deposit was refundable.Ultra Tune also breached the Franchising Code by failing to provide marketing fund statements and audit reports to franchisees within the required time and failing to include sufficient detail in them.
The judge noted that Ultra Tune had tried to mislead the Court, by relying in its defence on documents which had not in fact been sent to the prospective franchisee-one of the reasons for the severe penalty.
This is what the Judge said:
“There must be no tolerance for manufacturing evidence to deceive a regulator, and even less when the deception is maintained in this Court.”