Spray Pave Australia has been caught out for misleading claims by the Australian Competition and Consumer Commission and has given a court enforceable undertaking to stop making claims to be a franchise and to be part of an international group.

Graeme Samuel, ACCC chairman, said “Any claims that a business is a franchise is likely to have a significant impact on whether someone purchases that business. It is important that the nature of business opportunities is not misrepresented.”

Samuel added the ACCC would be concerned that potential Spray Pave business purchasers would mistakenly believe they had the protection of the Franchising Code of Conduct and the benefits of an established franchise system.

Spray Pave acknowledged it is likely to have breached the Trade Practices Act 1974 by advertising on various franchising websites, and representing that it is a franchise when it is not a franchise; representing on its own websites that it is an international business with offices operating in Africa, America, Canada and India when it does not have offices in these countries; and making statements on a franchising website that no qualifications are necessary to operate a Spray Pave business when a builder’s licence is required in South Australia, New South Wales and Queensland to conduct spray paving work.

The company has agreed to place corrective notices on the relevant websites, implement a trade practices compliance program, and to refrain for three years from making any of the above representations without substantiation.