ACCC takes Megasave Couriers to court for allegedly misleading franchisees

Aussie franchisor Megasave Couriers and sole director Gary Bourne are in hot water for allegedly misleading franchise buyers about guaranteed income.

The ACCC is alleging that Megasave Couriers Australia falsely promoted its income guarantee – a minimum weekly payment of about $2000 and a $91,000 annual income – and is taking the case to the Federal Court.

It is also alleged that Megasave’s sole director, Gary Bourne, was knowingly involved.

The ACCC alleges false or misleading representations appeared in promotional statements, online marketing and advertising material and in documents provided to potential franchise buyers.

It alleges the courier firm failed to make minimum weekly payments to existing franchisees, yet continued to promote the guaranteed income to potential franchisees, and any payments that were made to existing franchisees didn’t add up to the guaranteed annual income.

In another allegation, the consumer watchdog suggests Megasave imposed a new, undisclosed condition on franchisees, requiring them to submit weekly sales leads in order to receive the minimum weekly payments.

ACCC deputy chair Mick Keogh said the organisation had received complaints from more than 30 franchisees,.

“We allege Megasave and Mr Bourne made false promises of a secure initial income for potential franchisees in the form of guaranteed weekly payments, which influenced potential franchisees to decide to buy a courier franchise from Megasave.

“This caused significant financial hardship and stress to franchisees who were expecting to receive the guaranteed minimum weekly payments and annual income after signing up. In a number of cases, these franchisees had taken out loans or used life savings to purchase the Megasave franchise,” Mr Keogh said.

“Purchasing a franchise is a big investment, and potential franchisees must be able to rely on the information from the franchisor being accurate.”

The ACCC is seeking penalties, redress for franchisees, disqualification orders against Gary Bourne, declarations, an order as to findings of fact, and costs. Interlocutory and final injunctions are also being sought to prevent Megasave and Mr Bourne from continuing to make the alleged representations.

On 19 June 2020, the ACCC obtained a Federal Court order freezing the assets of Megasave, Gary Bourne and other entities controlled by him.

These orders have since been replaced by Bourne’s undertaking to the Court, which remains in place until revoked by the Court.