The Consumer Protection Act (CPA) to a large extent codified our South African consumer-related common law and provided a Bill of Rights for consumers. As franchisees fall within the definition of a consumer, there are various key considerations which franchisors must be cognisant of when supplying goods to their franchisees.
The Consumer Protection Act (CPA) to a large extent codified our South African consumer-related common law and provided a Bill of Rights for consumers. As franchisees fall within the definition of a consumer, there are various key considerations which franchisers must be cognizant of when supplying goods to their franchisees.
WHILE THE SUPPLY of goods to franchisees constitutes an additional income stream for many franchisers and the practice appears to be on the increase, in terms of the basic provisions of the CPA franchisers should not apply coercion, undue influence, pressure, duress or harassment, unfair tactics or any other similar conduct in connection with the marketing, supply and sale of products to franchisees. In addition, no false, misleading or deceptive representations should be made and all material facts relating to the products should be disclosed.
The CPA, of course, also applies to transactions between franchisees and their clients/customers. It is therefore important to have standard terms and conditions so as to manage those transactions and protect the franchisees, the franchise system and the franchisor as far as possible.
SECTION 13 OF THE CPA
Section 13 of the CPA is particularly relevant and reads as follows — “Consumer’s right to select suppliers
13. (1) A supplier must not require, as a condition of offering to supply or supplying any goods or services, or as a condition of entering into an agreement or transaction, that the consumer must—
a. purchase any other particular goods or services from that supplier;
b. enter into an additional agreement or transaction with the same supplier or a designated third party; or
This story is from the March - April 2017 edition of SA Franchise Warehouse.
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This story is from the March - April 2017 edition of SA Franchise Warehouse.
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