Pursuant to Consumer Protection Act, the definition of a ‘franchise agreement’ is as follows:

 

• an agreement between two parties, being the franchisor and franchisee, respectively;

 

• in which, for consideration paid, or to be paid, by the franchisee to the franchisor, the franchisor grants the franchisee the right to carry on business within all or a specific part of the Republic under a system or marketing plan substantially determined or controlled by the franchisor or an associate of the franchisor;

 

• under which the operation of the business of the franchisee will be substantially or materially associated with advertising schemes or programmes or one or more trademarks, commercial symbols or logos or any similar marketing, branding, labelling or devices, or any combination of such schemes, programmes or devices, that are conducted, owned, used or licensed by the franchisor or an associate of the franchisor; and

 

• that governs the business relationship between the franchisor and the franchisee, including the relationship between them with respect to the goods or services to be supplied to the franchisee by or at the direction of the franchisor or an associate of the franchisor.

 

Foreign persons are free to conclude franchising agreements with local persons. Franchising is regulated by common law. In addition, the Consumer Protection Act deals with certain aspects of franchising. It introduces aspects such as equity, reasonableness and no unjust prices as well certain formalities to entering into a franchise agreement. Pursuant to applicable law, a franchise agreement must (a) be in writing and signed by or on behalf of the franchisee; (b)  include any prescribed information or address any prescribed categories of information, such as disclosure which has been published in the regulations; and (c) • be in clear and understandable language. Furthermore, a franchisee may cancel a franchise agreement without cost or penalty within 10 business days of signing such agreement by giving written notice to the franchisor and the minister may prescribe information to be set out in franchise agreements either generally or within specific categories or industries.

 

Every franchisor must provide the prospective franchisee with a disclosure document, dated and signed by an authorised officer of the franchisor, at least 14 days prior to the signing of a franchise agreement. Both a master franchise agreement and a sub franchise agreement will fall within the definition of a franchise agreement.

 

The person or entity granting the rights, who is obliged to provide a disclosure document.