Dealing with deposits in terms of Franchise Agreements
It is common practice, during the course of discussions between a franchisor and a prospective franchisee, with a view to concluding a franchise agreement, for the franchisor to require the franchisee to make payment of a deposit. In such cases, the franchise agreement, or another document that the franchisor requires the franchisee to sign, in anticipation of the conclusion of a franchise agreement, often states that the deposit is “non‑refundable” in the event that a franchise agreement is not signed, or, having been signed, is cancelled shortly thereafter. There remains a significant amount of misunderstanding around the question as to …
South Africa leads the way in franchising
As franchising becomes saturated in developed countries, the emerging markets like the Far East, China, India, South America, Eastern Europe and Africa become fertile grounds for franchising to take root. FASA has spent many years making sure that the international franchise community is cognisant of the potential that lies within South Africa. As the future frontier of franchising, Africa and in particular South Africa needs to stand up and be counted. It is a recognised fact that South Africa is the springboard for potentially explosive growth into Africa and the stark reality is that the broader African economies cannot …
The Facts on Franchising
Following a presidential summit on job creation between the South African government and Business Unity SA (BUSA) and taking into account Finance Minister Pravin Gordhan’s reference in his 2011 budget speech to the fact that 68% of private-sector employment was provided by small business with less than 50 employees, FASA would like this vital area of business to be included in government’s forward planning and given more support. With only 17 business sectors benefiting from franchised systems in South Africa, compared to between 25 and 50 in countries like the USA, the UK, Australia and Brazil, there is ample room …
Am I suited to Franchising?
Franchising is not for everyone or the faint-hearted and there are the negatives – from whether you are suited to franchising to the controls that the franchisor imposes on your business. Although most franchisees have an element of entrepreneurship inherent in them, most are former employees, from corporate backgrounds, or are the victims of mergers or downsizing, or are on the verge of retirement. On a personal level you should ask yourself the following questions… …
How to Franchise Your Business?
Franchising is a fantastic method of raising capital and employing dedicated, passionate and motivated management (franchisees) to grow a business concept quickly and effectively. When implemented correctly a good franchise results in a win-win situation as it also reduces the investor’s risks. However, if it was easy, every franchise would be a stunning success and sadly that is not always the case. If the original concept from which the franchise derives is successful and proven – the next step to ensure long term success to the benefit for all parties involved is the implementation of some basic principles and structures. …
What is Franchising?
The word “franchise” in French means “privilege” or “freedom” – in essence giving an individual the “right” to something – in this case the right to operate a business or licence under specific conditions. Franchising is, without doubt, the most “public” of business formats. You recognise a franchise because it carries a strong brand, has a distribution mechanism that reaches far and wide and provides a uniform product, service and image to the public. The word franchising, however, can apply to many “rights” – from the franchising rights of cartoon characters like Mickey Mouse or movies like the Matrix to …
What are the Pro’s and Con’s of Franchising?
The Pro’s of Franchising Buying into a proven turn-key operation The advantage of buying a turn-key business with an established brand and tried and tested operational procedures is probably the most important advantage to investing in a franchise. Reduction of risk Whilst it is not an absolute given, the very fact that only 20% of franchises fail compared to the standard norm of 80% of independent businesses, it is safe to say that buying into a franchise system is less risky as you are buying into an established concept with proven operating standards. …
How do I access finance to buy a franchise business?
“What often causes businesses to fail is not their profitability but their cash flow.” If there is one lesson that has been learnt it’s that cash flow and the strict management of finances is at the core of every successful business. With access to finance restricted, it becomes even more important to make sure that every business has a ‘living’ business plan that will guide you through the maze of challenges and that stricter financial controls are put in place. …
Where do I Start?
Changing a career path is a momentous step and deciding to invest in a franchise business needs to be taken seriously. Jumping into self-employment with the first franchise that takes your fancy is not a wise move. Spending time investigating the franchise sector, what’s on offer and how the various companies are structured is crucial to making the right decision. …
Termination of Franchise Agreement Best Practices
Franchise Agreement – FASA Practice Note – Section 197 of the Labour Relations Act The termination of a franchise agreement by the franchisor does not in itself constitute a transfer of a business as a going concern, even if the franchisor thereafter appoints another franchisee in the same area, and serving the same customers, as the previous franchisee. Therefore, the new franchisee is not obliged to take over the rights and obligations of the previous franchisee towards its employees, as is required in terms of section 197 of the Labour Relations Act on the transfer of a business as a …
Products
-
2023 Franchisor Survey
R1,500.00 -
2024 FASA Franchise Manual
R420.00
FASA Franchise Members
FASA Supplier Members
