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ARTICLE · 27 NOVEMBER 2019

A New Franchising Code Is Imminent

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Seen as long overdue, the Consumer Protection Act (CPA) was introduced in 2011 and was expected to level the playing field, shifting power from franchisors to franchisees.

South AfricaCorporate/Commercial Law
Eugene Honey
Eugene Honey
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Seen as long overdue, the Consumer Protection Act (CPA) was introduced in 2011 and was expected to level the playing field, shifting power from franchisors to franchisees. However, the legislation has come under fire, being criticised by organisations as another barrier to doing business in South Africa.

First-off, entrepreneurs looking to become young budding franchisors should first understand the regulations governing the franchising industry, such as the CPA and FASA's new code, to avoid incurring unnecessary costs and possible legal battles.

Not only must relationships with franchisees must comply with the CPA, but franchise agreements governing relationships need to contain prescribed clauses and information.

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