Franchise and Licensing Lawyers

We are specialist Franchise Attorneys situated in Woodmead, Sandton.

Our knowledge and experience of the law of contract enables us to accurately and effectively advise and assist clients in protecting their contractual rights.

Definition Of Franchise

A franchise is where a franchisor grants a license to a franchisee for the right to use certain intellectual property of the franchisor, such as, know-how, trade mark or trade name as well as established operating systems and procedures.

Types Of Franchise

There are varying degrees of franchise; the first is where the franchisee acquires only the right to sell a certain product/s of the franchisor. The second is where the franchisee acquires the right to use the entire franchisor’s business concept.

Example 1: franchisee purchases from a fast food chain the right to sell a certain product for example their branded tomato sauce.

Example 2: franchisee purchases the right to make use of the fast food chain’s entire business concept for example by opening a new branch, alternatively purchasing an existing branch as a going concern.

Lack Of Statutory Regulation And FASA

South Africa does not presently have a specific body of legislation governing the relations between franchisor and franchisee.

Although the FASA (Franchise Association of South Africa) prescribes a code of conduct and code of ethics for franchisors, FASA is not vested with the statutory powers (presently) to enforce such compliance.

The lack of statutory regulation provides an opportunity for unscrupulous franchisors to take unfair advantage of their franchisees and we specialise in assisting victimized franchisees to uphold and protect their rights. In addition we represent and assist franchisors in both setting up and enforcing franchise agreement terms.

The Franchise Agreement

It is precisely because of the lack of statutory regulation that the franchise agreement should be comprehensive and appropriately tailored right at the outset. The franchise agreement will regulate matters such as:

• Timeous and correct payment of fees and royalties by the franchisee
• Upfront fee
• Trademark licensing terms
• Maintenance of clearly defined operating procedures and standards
• Clearly defined rights and obligations

We Assist With:

• Advice on how to structure a franchise relationship
• Drafting of franchise agreements
• Registration of franchisors with FASA (Franchise Association of South Africa)
• Disputes between franchisee(s) and franchisors and related
• Unfair business practices

We strive to protect both our client franchisors’ and client franchisees’ respective rights to ensure harmonious and fair commercial transacting at all levels.

In addition we ensure and protect our clients’ rights in terms of FASA’s code of ethics and business practice principles, and where necessary liaise directly with FASA ombudsmen with regard to protection and upholding of such rights.