Mailpost is a print and distribution business for unaddressed promotional mail. In December 2009, the ACCC instituted proceedings in the Federal Court in Sydney against Mailpost Australia Limited (Mailpost), its director Mr Peter Kritas and its NSW sub franchisor Mailpost Postie Network Sydney Pty Ltd (MPNS) for alleged breaches of the Trade Practices Act 1974 (Cth) (the Act).

The ACCC argued that Mailpost and MPNS breached the Franchising Code of Conduct (the Code) and section 51AD of the Act by failing to provide prospective franchisees with a disclosure document. In addition, the ACCC alleged that Mailpost and MPNS made a number of false, misleading and deceptive representations to franchisees and prospective franchisees including that:

• the business was "probably the fastest growing franchise type operating in the whole world"
• the business was "recession proof"
• Mailpost has a number of corporate customers "on the way".

This result serves as a clear warning to all franchisors, highlighting the perils of failing to comply with the Franchising Code. ACCC Chairman Graeme Samuels stressed that "the ACCC will not hesitate to take court action against franchisors and associated individuals that use misleading statements when attempting to recruit new franchisees to a franchise operation."

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