ACCC asks Midas franchise to remove representations from Franchise Council website

Midas car care franchise has removed representations from the Franchise Council website concerning the number of Midas stores and projections for expansion, following an inquiry by the Australian Consumer and Competition Commission.

According to a letter from the ACCC to the complainant Cher Borradale, dated 8 February 2008, the representations were correct when the information was uploaded to the website in 2005, but have since become inaccurate.

Following inquiries from the ACCC, the representations were removed and potential franchisees are now directed to the Midas website and the Midas disclosure document.

The ACCC’s regional director Bob Weymouth writes: “I have conveyed to Midas the need to ensure all representations it makes, no matter what form of media, must be maintained and accurate, emphasising that representations as to future events must be based on reasonable grounds at the time of making the representation.”

SmartCompany.com.au attempted to contact Midas Australia’s new chairman John Fletcher and chief executive Phillip Bonney this morning. But a spokesperson for the company said both were unavailable for comment.

As SmartCompany.com.au reported yesterday, Lazard Carnegie Wylie Investment Management, and former Coles Myer, chief executive John Fletcher have invested an undisclosed amount in the 90-store car care chain.

Fletcher, who was chief executive of Brambles before he joined Coles Myer, has become the company’s chairman, and a representative of Lazard Carnegie Wylie has also joined the board.

In his announcement, chief executive Phillip Bonney said: “With the support and breadth of experience of our two new shareholders, the Midas Group is now well positioned to implement an aggressive growth strategy for the Australian market.”

Franchisees are rumoured to be shocked by the deal and nervous that new products Fletcher and Bonney may introduce to the network, such as LPG conversions, may not address their concerns about diminishing profitability.