Data, property, finance and security instruments · 06
Franchise agreement
Licenses a business system — under the only chapter of the Consumer Protection Act that applies whatever the size of the franchisee.
Licenses a business system — under the only chapter of the Consumer Protection Act that applies whatever the size of the franchisee.
Everything the Consumer Protection Act and its regulations prescribe — the disclosure document delivered at least fourteen days before signature, the prescribed cover-page wording, territory, fees and marketing fund, term and renewal, training and support, and the franchisor’s obligations.
The CPA applies to every franchise agreement regardless of the size of the franchisee — the usual threshold does not save the franchisor. A franchisee may cancel within ten business days of signature without cost or penalty, and an agreement missing the prescribed contents is open to challenge for its life. With the Competition Commission’s franchising market inquiry under way, this is an area about to be looked at rather than assumed.
The law it sits under
What governs this instrument.
Section 7 of the Consumer Protection Act 68 of 2008 governs franchise agreements, and regulation 2 of the Consumer Protection Act Regulations prescribes what a franchise agreement must contain. Section 7(2) gives the franchisee a right to cancel without cost or penalty within ten business days of signature — a cooling-off right that cannot be contracted away.
Related pages, tools and documents
Where this instrument sits in the wider set, and the engagement that produces it.
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