Ultra Tune cops $2.6m ticket

The Federal Court has imposed a $2.6 million penalty on Ultra Tune Australia, after it found the automotive servicing and roadside assist company made false or misleading representations about a franchise site, and then tried to mislead the court in its defence.

Justice Robert Bromwich found that the company had breached the Franchising Code in its dealings with a prospective franchisee in 2015.

The prospective franchisee was also told that a $33,000 deposit was refundable when it was not.

Ultra Tune also breached the Franchising Code by failing to adequately prepare marketing fund statements.

Justice Bromwich said Ultra Tune then attempted to mislead the court by relying on documents purportedly sent to the prospective franchisee.

“There must be no tolerance for manufacturing evidence to deceive a regulator and even less when the deception is maintained in this court,” he said.

These are the first proceedings that the Australian Competition and Consumer Commission have brought against a franchisor alleging a breach of the Franchising Code obligation to act in “good faith” in business dealings with franchisees.

The court ordered Ultra Tune pay the prospective franchisee his $33,000 deposit back with interest.

Ultra Tune has 27 franchises in Western Australia, which places it 32^nd on the BNIQ franchises list.