Unfortunately, many of the aforementioned provisions in the franchises and franchises that affect the Competition Commission are essential and very often for the reasons for the success of the franchises. However, the government has recognized that franchising is a viable way to strengthen its development of small and medium-sized enterprises in South Africa, and a new act of franchising has been developed to introduce some regulation for the franchising industry. FASA has made substantial recommendations that are not very different from EAS`s approach and practices for many years, as it is an ethical candour and protection of the interests of both parties from the perspective of a sustainable win-win situation associated with the evolution of franchising in general. As a franchisor, your franchise agreement is the most important and important legal document that governs and defines the relationship with your franchisees. As part of your franchise agreement, you grant your franchisees the right to create and develop their franchise sites and, in return, franchisees agree to create and maintain their franchises in accordance with the mandates of your system and to pay you certain ongoing fees. The granting of intellectual property licenses to the franchisee is a central theme of the franchise agreement. The three key areas of intellectual property in most franchise systems are trademarks, copyright and know-how. The franchisee pays an upfront fee, often simply referred to as franchise fees. In addition to these one-time fees, the franchisee pays current licensing and advertising fees as well as royalties, annual royalties and more.
The amount of the deductible fee is set on a case-by-case basis. Many franchisors offer their franchisees different levels of education. While you don`t want to micro-manage your franchisees, many will be business owners for the first time and will not be sure how they can start and run a business. The franchise agreement may contain instructions on which registration software the franchisee must use and what records they must keep. The franchisor may also give itself access rights to these records in the franchise agreement. Key: Federal law requires disclosure of 23 key points through a franchise, which are defined in a franchise disclosure document before the money is exchanged. However, it is in the interests of both the franchisor and the franchisee to obtain independent legal advice on the franchise agreement prior to signing. The agreement must also be flexible enough to allow the franchisor to make contractual changes that reflect decisions made in response to the specific needs of franchisees. However, there is no change to the provision that franchisees must manage their independent businesses on a daily basis in accordance with brand standards.
The limitation of trade provisions should be proportionate with regard to the territory, the nature of the activity and the period.