This exacerbates the difficulties faced by foreign franchisors. These franchisors are not able to provide the necessary information without its own fault, but at the same time they are not able to induce the potential franchisee to waive its rights to the undisclosed information. At present, the position of our law seems to be that foreign franchisors must either present forecasts or predictions that depend on non-existent or unreliable information, or decide not to enter the South African market. This is hardly a smart position for a country that seeks to promote the business model of the franchise and encourage foreign investment. (c) regulating the commercial relationship between the franchisor and the franchisee, including the relationship between them with respect to the goods or services to be provided to the franchisee by the franchisor or an associated franchisor or a franchisor`s associated business.” At first glance, it appears that some large franchisees are not protected by law. S5 (2) (b) stipulates that the law does not apply to transactions in which the consumer is a legal entity, including assets or annual turnover at the time of the R2Mio transaction. or more. The practical effects of non-compliance with the CPA in the negotiation and conclusion of franchise agreements will not be visible until the National Consumer Court, the Consumer Court and/or the National Consumer Commission have made findings in due course. However, it is advisable not to be the test case. In general, a licensing agreement is much simpler and generally has less legal impact. Such an agreement can be as simple as granting the licensee the unconditional right to use a heritage value for the payment of a royalty.
However, licensing a trademark is more complex. Licensing an unverified or abandoned trademark can lead to dilution. Therefore, in order to preserve the distinctiveness of a licensed trademark, licensees insist (rightly) on exhausting licensing agreements that control almost every aspect of the use of their trademarks. This measured control covers almost all aspects of the licensee`s business. In this case, the licensee may sometimes inadvertently enter the franchisor`s territory. The typical control requirements of a franchise agreement include the requirement for a franchisee to follow a specific methodology inherent in a franchisee`s trading system, such as site selection. B, production techniques, operating methods, training techniques, marketing and advertising techniques, management and advertising techniques, information technology, business links and business associations, operating manual content, intellectual property rights, commercial clothing, technical information and equipment, procurement requirements and other standards. The CPA grants significant new legal rights to franchisees and franchisors who now face significant additional obligations. The CPA imposes both the form and content of franchise agreements and imposes, among other things, explicit pre-contracting indications and franchisor assurances, provides for cooling times and even indicates that franchise agreements should not be “unfair”.