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Phone franchise has been fined over attempts to block franchisees wishing to exit its network.

Allphones, which has bases throughout Australia, has been stung with a $45,000 fine for contempt of court by Justice John Nicholas in the NSW Federal Court yesterday. 

The Federal Court penalised Allphones Retail Pty Ltd $45,000 for contempt of orders following action by the Australian Competition and Consumer Commission, the body confirmed today.

Justice Nicholas found that the conduct by a number of Allphones’ senior personnel was both ‘serious’ and ‘deliberate’, having breached two undertakings given to the court in October 2008.  

These prohibited the company from withholding consent to the assignment of an Allphones franchise, if the franchisee would not sign a deed releasing Allphones from liability.

An order also required Allphones to give the ACCC 7 days’ written notice of its intention to withhold consent to the assignment of an Allphones franchise, on the basis that the new franchisee must enter into a new franchise agreement.

At the time the previous case was heard in 2008, Allphones was involved in another legal action with the ACCC for unconscionable conduct, which it was found guilty of and fined $3 million, which was to be shared between 55 franchisees, SMH reports.

 “This decision sends a clear message that the ACCC and the Court regard breaches of court orders very seriously,” ACCC Chairman Graeme Samuel said today.

“Those who act in contempt of court can expect to be vigorously pursued by the ACCC,” he warned.

Allphones website contains the following advertisement looking to attract potential franchisees:  “This is a chance for highly motivated, dynamic people to invest in a business with an established customer base, proven product and service offering, strong market position and a well recognised, highly valued brand.”

The mobile giant acknowledged that its conduct was both wrongful and culpable, and apologised to the Court and franchisees. 

Justice John Nicholas found the company breached the 2008 court orders on four occasions and fined $15,000 for each breach. 

 
”The conduct engaged in contrary to the undertakings was deliberate. It was engaged in by a number of the respondent’s senior personnel who – it may be inferred – were aware at all relevant times of the terms of the undertakings provided by the respondent to the Court,” the judge said. 


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