Compliance & disputes

Misleading or deceptive conduct

Conduct likely to mislead or deceive, prohibited by the Australian Consumer Law. In franchising it often concerns representations made during the sales process.

What it means

The Australian Consumer Law prohibits conduct that is misleading or deceptive, or likely to mislead. It does not require intent, a franchisor can breach it by creating a false impression even innocently.

In franchising, this most often bites on pre-sale representations: overstated earnings, promised support, or territory claims that the agreement does not deliver. It is a powerful protection precisely because it does not depend on proving bad faith.

In practice

Get every material representation in writing. If a franchisor's pre-sale claims turn out to be false or unsupported, misleading-conduct provisions may give you a remedy even if the agreement itself was signed.

A real example

A franchisee who was shown optimistic earnings projections that had no reasonable basis relies on the misleading-conduct provisions of the ACL, because the projections created a false impression she reasonably acted on.

Misleading or deceptive conduct, FAQs

What counts as misleading conduct in franchising?

Conduct likely to mislead or deceive, often pre-sale claims about earnings, support or territory that prove false. Under the ACL it does not require intent, only that it was likely to mislead.

Do I have a remedy if a franchisor misled me?

Possibly. The ACL's misleading-conduct provisions can apply even after you have signed. Keep representations in writing and get legal advice.

See the full franchise glossary, the Fee Index or our buyer guides.