h ot to pi c s
Behind the
headlines Service franchisor’s furious lockdown letter and early court win The founder of home services company Jim’s Mowing responded to Victoria’s fourth major lockdown in 12 months by sending an open letter to the Victorian government questioning the logic and science behind restricting garden maintenance workers from working alone outdoors, according to a media report. In his letter, Jim Penman described the government’s decisions as “continued mismanagement causing terrible harm” and went on to describe how his franchisees were suffering from suicide attempts and marriage breakdowns as a result of lockdown restrictions. Penman is also supporting a franchisee who is seeking compensation from the Victorian State Department of Health and Human Services (DHHS) for lost income during the seven-week lockdown in 2020. If successful, the claim could set a precedent for hundreds of other business owners similarly impacted by the lockdown. Meanwhile, Penman and his franchisee have a had an early win in their bid for compensation after the Victorian Civil and Administrative Tribunal deputy president ruled the case would not be consolidated with those of other businesses seeking similar outcomes, according to a media report. The DHHS had sought that the seven cases should be heard jointly on the preliminary
question of whether the chief health officer had sufficient grounds to authorise the use of his emergency powers, arguing that they would all cover the same or similar ground.
Franchisor’s $23m penalty for misleading franchisees The company which formerly operated Jump Swim Schools has been ordered to pay penalties of $23 million for deceiving franchisees, and its managing director Ian Campbell must pay $500,000 in compensation and a penalty of $400,000, according to the Australian Competition and Consumer Commission (ACCC). A Federal Court action instigated by the ACCC found that Jump Loops Pty Ltd, the company which formerly operated Jump Swim Schools and which is now in liquidation, falsely represented to 174 franchisees between March 2016 and July 2019 that they would have an operational swim school within 12 months of signing a franchise agreement. Most franchisees never received an operational swim school, while Jump accepted payments from 127 franchisees when it knew there was no reasonable basis that they would be able to supply a swim school within 12 months, or a reasonable period of time. Despite the severity of the $23 million penalty levied against Jump Loops Pty Ltd, the company is in liquidation and the penalty is unlikely to be paid. However the $500,000
68 Business Franchise Australia and New Zealand
in compensation to be paid by Ian Campbell is expected to be distributed across 131 franchisees. The court ordered Campbell be restrained from involvement as a franchisor in a business in Australia for three years, and from making representations about timeframes or wrongly accepting payment relating to a franchise for a period of five years. Ian Campbell is currently based in the United States, where he has launched swim schools under the Jump! and Blast brands. Media reports indicate franchisees of these in the United States are experiencing the same problems with massive delays in the opening of swim schools. Jump Loops collapsed in 2019, and the franchise with 60 swim schools was bought out of liquidation by the Belgravia Group, which operates the business today.
Listed franchisors commit to gender balance initiative Two publicly listed Australian franchise groups have set targets to achieve a gender representation of at least 40% females in executive leadership roles by the year 2030 as part of diversity initiative launched last year. The two listed franchise brands, Domino’s Pizza Enterprises, and Tabcorp Holdings, have both committed to the 40% target, however are already very close. Of the 10 executive leadership roles at Tabcorp, three are already
