The Australian Competition and Consumer Commission has launched court action against a national car wash franchisor accused of lying to prospective franchisees about its business model, potential income and business sources.
Geowash – based in Victoria - has eight franchisees in Perth in locations such as Osborne Park, Joondalup, Westminster, Wanneroo and Midvale.
![The ACCC has commenced legal action against the owners of Geowash for allegedly misleading franchisors.](http://web.archive.org./web/20170602043235im_/https://www.fairfaxstatic.com.au/content/dam/images/g/w/h/f/5/0/image.related.articleLeadwide.620x349.gwhf0w.png/1496215629404.jpg)
ACCC deputy chair Michael Schaper alleged the company's director Sanam Ali and national franchising manager Charles Cameron knowingly engaged in misleading potential franchisees.
"The ACCC investigated Geowash's conduct following complaints from franchisees alleging that they had been misled about their establishment costs, and ultimately had not been provided with an operating car wash franchise," he said.
"The ACCC was particularly concerned that, allegedly, franchisee funds were used for purposes other than those permitted by the franchise agreements, including as commissions paid to the director and franchise manager."
On its website, Geowash advertised prospective franchisees they could make revenues of $70,216 and estimated profits of $30,439 in an average 28-day period.
It also allegedly falsely stated it had relationships or affiliations with car companies such as Nissan, Kia, Audi, Shell, Hertz and Thrifty.
Two former franchisee's Ravi and Mani, told Radio 6PR during a talkback segment on Wednesday they had fallen victim to the franchise model and had since rebranded their car washes.
Both claimed it took two years for their stores to be built, and both invested $300,000.
"They took almost two years to finish my store but if I tell you other stories, I'm only a little victim, the biggest victim, some people they paid $600,000 and they never got a store," Ravi said.
"They always targeting same people, mostly migrants from other countries with little English and little business knowledge."
If granted leave by the court to commence proceedings against Geowash, the ACCC will seek declarations, injunctions and an order for the payment of pecuniary penalties.
It will also seek orders disqualifying Ms Ali and Mr Cameron from managing corporations for a period of five years.
Geowash has been contacted for comment.
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