Understanding important legal aspects of franchising

A Franchise Agreement is a sophisticated form of Licence Agreement. It is, therefore, necessary to first look briefly at what a license is and what can be licensed. The graph below sets out the essentials of a License Agreement. You will note that at the core, it is a contractual business relationship between a licensor

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Compliance with the consumer protection act is essential

The Consumer Protection Act (“the Act”) applies to franchise agreements and poses significant challenges to weaker franchisors, including those which do not abide by best franchise practices or provide a reasonable value to their franchisees. In terms of the Act, a “franchise agreement” means an agreement: where a franchisor, for consideration, grants to the franchisee

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Lease agreements – pitfalls and negotiation points

When considering how to approach lease negotiations, franchised businesses can be divided into two main categories. The category into which a business falls will play a role in determining the issues that may arise and the importance to be attached to each one: Area-based franchises: These are typical in franchises that offer services, such as

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Read the disclosure document

The key to making an educated decision when becoming a franchisee Becoming a franchisee can be somewhat daunting, especially when you don’t know how to make sense of the various franchise opportunities or to evaluate a particular franchisor’s operation. Thankfully, the Consumer Protection Act, 68 of 2008 (“the CPA”) has stepped in, assisting prospective franchisees

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