Girchow Enterprises Pty Ltd v Ultimate Franchising Group Pty Ltd (Final Hearing) [2023] FCA 420

Girchow Enterprises Pty Ltd v Ultimate Franchising Group Pty Ltd (Final Hearing) [2023] FCA 420

Each of the franchise agreements and guarantees was entered into because of misleading or deceptive conduct within the meaning of s 18 of the Australian Consumer Law, primarily by reason of representations about establishment costs and business viability for the franchise businesses; damages are to be awarded for losses suffered, including capital outlays, borrowing costs, and operating losses, less the value of the businesses as at 31 December 2022.

Jurisdiction
Australia
Judgment Date
05 May 2023
Procedural Posture
Federal Court Civil Proceedings / Final Judgment After Trial and Referee's Report
Outcome
Franchise agreements and guarantees set aside; damages awarded for losses sustained; further orders to be made for the Castle Hill Franchise loss quantification.
Legal Topics
['misleading or Deceptive Conduct' 'franchising' 'damages' 'contracts' 'remedies']
['consumer Law' 'commercial Law'] ['misleading or Deceptive Conduct' 'franchising' 'damages' 'contracts' 'remedies']

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 1 Authorities cited 2 Party arguments 2 Amounts and remedies 1
Sign in to unlock

Procedural Posture

Federal Court Civil Proceedings / Final Judgment After Trial and Referee's Report

Legal Issues

  1. 1 ['Whether the respondents engaged in misleading or deceptive conduct under s 18 of the ACL in relation to gym franchise agreements and guarantees' 'Whether applicants were induced to enter into franchise agreements and guarantees by representations about set-up costs and likely income' 'Whether damages are payable and how losses should be quantified under s 236 of the ACL']

Ratio Decidendi

Each of the franchise agreements and guarantees was entered into because of misleading or deceptive conduct within the meaning of s 18 of the Australian Consumer Law, primarily by reason of representations about establishment costs and business viability for the franchise businesses; damages are to be awarded for losses suffered, including capital outlays, borrowing costs, and operating losses, less the value of the businesses as at 31 December 2022.

Court Disposition

Franchise agreements and guarantees set aside; damages awarded for losses sustained; further orders to be made for the Castle Hill Franchise loss quantification.

Orders

  • ['Parties to confer and agree on final orders and costs by 11 May 2023.' 'Proceedings listed on 12 May 2023 to resolve any disputes as to appropriate orders.' 'Franchise agreements and guarantees for all three franchisees declared void.' 'Applicants entitled to damages: Balcatta Franchise – $1,744,816 (plus...