Category: Franchising Legal

Section 197 of the Labour Relations Act, 66 of 1995 (LRA) provides that “if a transfer of a business takes place, … the [new owner of the business] is automatically substituted in the place of the [previous owner] in respect of all contracts of employment in existence immediately before the date of transfer”. In the context of a franchised business, this section raises some interesting questions. The cornerstone of a franchised business is an agreement between the business owner (the franchisee) and a franchisor. Ian JacobsbergIan is a practicing attorney with over thirty years’ post-admission experience in the areas of …

Although franchising is a proven business model, contributing 15% to South Africa’s GDP through its over 700 franchise systems and around 68 000 franchisees, two recent court cases involving well-known franchise brands Romans Pizza and Cash Crusaders have put the spotlight on difficulties that can arise in the business and legal relationships that exist between franchisor and franchisee. The franchisee litigant from Romans Pizza stated in a media release in December 2023 that ‘franchisees receive minimal protection in such instances from industry bodies like the Franchise Association ostensibly designed to represent the interests of both parties, often skewed in favour …

While franchising is seen as a safer way to get into business using the know-how of someone who has done the time and made the mistakes, it does come with some conditions in the form of several binding legal contracts and agreements. This is to be expected when one considers that the franchisor is, in effect, sharing his intellectual property and business success secrets with his franchisee partners. Understanding why you are signing a contract and accepting the contract terms and conditions and you won’t have a problem. Once a contract is signed and sealed by both parties, there is …

To some becoming a ‘director’ is a career achievement but often is not taken with the gravitas that it should. To some people, sitting on a company board as a director is often viewed as a golden ticket to picking up a large remuneration without doing too much work and more importantly not understanding the duties and responsibilities attached to that ‘directorship’. Maria D’Amico of D’Amico Incorporated Attorneys and incoming Chair of FASA gives an overview of the importance of serving as a director. Maria D'AmicoMaria D’Amico holds an LLB in Law (obtained at WITS) and has been practicing as …

According to Charl Groenewald of Macrobert Incorporated, one of FASA’s legal service providers that specialise in franchising, in certain instances, the answer is a resounding ‘yes’“I have found that a number of franchisees do not properly understand what is meant by ‘arbitration’, and what it comprises of. Most seem to labour under the impression that arbitration entails some sort of informal settlement negotiation. Nothing can be further from the truth.” Charl GroenewaldCharl Groenewald is an expert franchise lawyer and skilled litigator who is well renowned for his skills pertaining to franchise litigation and resolving franchise disputes. Having been a franchisor …

In March 2020, the President announced that South Africa would enter into a nationwide lockdown for 21 days. Now, more than a year later, most South Africans continue to work remotely resulting in an increase in disputes over rental payments as both commercial tenants and landlords still find themselves uncertain of their rights and obligations regarding lease agreements during these unprecedented times. Nicola MullineuxNicola joined Fairbridges’ Commercial Department in 2018 and is responsible for the company secretarial services of a number of private companies as well as the drafting of various commercial contracts and other commercial documents including but not …

The Consumer Protection Act (“the CPA”) contains several mechanisms that consumers can use to enforce their rights against suppliers in relation to defective products or substandard services. Amongst these, section 82 of the CPA empowers the Minister of Trade and Industry to prescribe an industry code: Ian JacobsbergIan is a practicing attorney with over thirty years’ post-admission experience in the areas of competition, consumer and commercial regulatory law as well as corporate, commercial and other business-related law. His expertise and experience includes data protection and processing, mergers, acquisitions and sales of business, competition law, economic regulation (including international trade, data …

The franchisor may believe that once a franchise agreement has been signed with the franchisee and if the agreement contains the pertinent details that they discussed, then it is indisputable. What could possibly go wrong, if anything at all? Maria D'AmicoMaria D’Amico holds an LLB in Law (obtained at WITS) and has been practicing as an attorney for 33 years and working at Thomson Wilks Attorneys. Maria is an expert in commercial law, commercial litigation and franchising and her understanding of franchising law is invaluable to anyone involved in the franchising industry. Maria is also qualified as a Solicitor in …

The Disclosure Document is one of the key elements of a Franchisor’s franchise documentation requirements, and the legal requirements for a Disclosure Document are set out in Regulation 3 to the CPA, while FASA has supplemented these requirements for its members, in line with its Ethical Franchising requirements. FASA Franchise Association South AfricaTo protect, lobby, promote and develop ethical franchising across all sectors in South Africa with specific focus on transformation. www.fasa.co.za …

The Covid-19 pandemic has hit the pockets of many South African businesses and the situation has been no different in the franchise industry as the majority of franchisees are Small and Medium-sized Enterprises. Most franchisees are classified as non-essential services and as a result, have been forced to close their businesses for the duration of the Covid 19 enforced lockdown. Even with the gradual phasing in of return to business, fast food franchisees remain closed for on-site consumption. Personal care franchisees such a beauty salons and hairdressers remain closed all together. Garth KallisGarth specialises in commercial and intellectual property law. …

Following a recent case where the Commission for Conciliation, Mediation and Arbitration (CCMA) compelled a Spar Franchisee to comply with compliance orders issued and pay all complainants an amount of R 11,935,478 for gross violations of labour laws which were happening at their stores across the country, we asked Ansofie van der Walt of the LWO Employers Organisation to give labour guidelines. Labour law sets strict requirements that employers must comply with. Non-compliance holds a serious business risk for employers that is often underestimated and left unaddressed. Arbitration awards against employers have a definite financial impact and also negatively affect …