I INTRODUCTION
The franchise industry is very important to South Africa’s economy with its economic output as a percentage of GDP at 15.3% in 2017. This percentage contribution to GDP ranks it as one of the top 5 highest franchise industry contributors to a country’s GDP globally[1]. In a survey based on input from 22 countries, it was found that ‘on average, franchisors and franchisees employ eleven people per franchised business’[2]. South Africa therefore needs to support the continued and sustainable growth of its franchise industry.
A key component of any franchised business relationship is the franchise agreement between the franchisor and franchisee. It is by its nature a detailed and complex agreement and it appears that if left unregulated, it may often include terms that are heavily biased in favour of the franchisor. The franchise industry can not flourish if the general belief is that operating a franchised business as a franchisee would not be a worthwhile business investment due to the common treatment of franchisees by the franchisor. As such some regulation of franchise agreements is required.
In this paper I explain how franchise agreements are regulated in South Africa, and how South Africa’s relatively new Consumer Protection Act (‘CPA’)[3] governs unfair terms in franchise agreements, and prohibits certain terms outright.
II FRANCHISE AGREEMENTS AND THEIR REGULATION IN SOUTH AFRICA
(a) What are Franchise Agreements:
Franchise agreements govern the relationship between a franchisor and a franchisee, and record their different roles and responsibilities in those capacities. Franchising has been described as:
[A] business arrangement wherein one party, namely the franchisor, enters into a contractual relationship with another party, namely the franchisee, granting the franchisee rights to use the franchisor’s trade name and trade marks and to conduct a business in accordance with a specified format… The contractual relationship usually involves an exchange of fees and contractual responsibilities on both the franchisor and franchisee.[4]
Due to the nature of a franchised business, the franchise agreement needs to deal with a wide variety of matters, including, for example, the use by the franchisee of the franchisor’s intellectual property, the rules regarding the look, feel, and service or product offering of the franchised business, any exclusivity granted to the franchisee in any specific territory, and any non compete restrictions on a franchisee during the existence of the franchise agreement and after it terminates.
A franchisee owns his franchised business and its infrastructure, but must operate the franchised business under the terms of the franchise agreement, including its operational guidelines.[5] And the franchise agreement will only grant the franchisee the right to operate the franchised business for a specific time period. As such, a franchisee’s position as a business owner is markedly different to that of other business owners who are not subject to such rules and oversight, or time limitations on their business. The investment by the franchisee into the franchised business is often referred to as a ‘sunk’ investment, because the franchisee owns the assets, but the franchisor determines how they can be utilised.[6]
Franchisee agreements are often presented by a franchisor to the franchisee as a standard form contract which is not open to much amendment for a specific franchisee.[7] In addition, the franchise agreement often places onerous obligations on the franchisee because the franchisor is seeking to protect the goodwill of the franchise chain for his and the other franchisees’ benefit.[8]
A franchise agreement “combines elements of integration and delegation, control and independence and it is this multifaceted vertical structure that paves the way for endless relational and commitment problems”.[9]
Over the course of the business relationship between franchisors and franchisees, tensions between the franchisor and franchisee appear to commonly arise. In addition, even the typical, core terms of franchise agreements (rather than the terms that are bespoke to a specific industry or agreement) often contribute to the conflicts between the franchisor and franchisee, irrespective of how well they are drafted.[10]
For the various reasons mentioned above, some protection of franchisees through legislation is understood to be necessary.
(b) Regulation of the Franchise Industry in South Africa
In the late 1990s the South African government recognised the important role that franchising could play in the economy (in respect of wealth and job creation and the empowerment of the previously disadvantaged[11]), and established a task team to investigate how the industry could be regulated.[12] At that time, there was no legislation in South Africa that specifically regulated franchise agreements and the franchise industry. Franchise agreements were “treated as a normal commercial contract subject to the same rules and considerations as other commercial matters”.[13]
Although the task team recommended that specific legislation be enacted to govern the franchise industry, the recommendation was never implemented. Instead, franchise agreements were specifically brought under the scope of protection of the CPA. Prior to that, franchise agreements were regulated mostly by the parties themselves, and interpreted and enforced by South Africa’s ‘civil courts relying on the general principles of the law of contract’.[14]
The CPA expressly governs franchise agreements, and treats the franchisee as a consumer under a franchise agreement, irrespective of whether or not the franchisee is a natural person or juristic entity, and irrespective of the size of the franchisee’s asset value or annual turnover.[15] The CPA treats the franchisors as suppliers of goods and services to the franchisee, and records various obligations to which they must adhere.[16] As such, understanding how the CPA governs franchise agreements is of vital importance.
When considering what governs franchise agreements, franchise industry codes must also be considered. Currently, the franchise industry is subject to self-regulation under certain codes.[17] However, in terms of section 82 of the CPA, the Minister may prescribe a franchise industry code on the recommendation of the Commissioner of the National Consumer Commission, and such a draft code was submitted to the Consumer Protection Commission for consideration during the year 2000. Once prescribed by the Minister, the code will be binding on all franchisors and franchisees. The draft code has been collaboratively prepared by the Franchise Association of South Africa together with the National Consumer Commission, and consists of two main areas: an alternative dispute resolution mechanism for disputes between franchisors and franchisees; and a code of conduct aimed at regulating behaviour within the franchise industry and providing for certain matters not dealt with by the CPA.[18] The draft code was also published by the Department of Trade and Competition as an annexure to a ‘discussion document’ in which the Department invited the public to comment on the draft codes in an informal manner.[19] However the draft code has not yet been published in a government gazette for formal consultation, and so has also not been submitted to the Minister for final consideration and approval.
(c) Why are large, juristic entity franchisees not excluded from the CPA’s protection?
As mentioned above, the CPA governs franchise agreements irrespective of the wealth of the franchisee if he is a natural person, and irrespective of the net asset value or annual turnover of a franchisee if it is a juristic person. The CPA in general protects consumers against suppliers taking advantage of the consumers’ inherent lack of bargaining power. For this reason, other than in respect of franchisees, the CPA does not protect larger juristic person consumers[20], on the understanding that they will likely have a more equal bargaining power in relation to the supplier, and can fend for themselves. So why then did the drafters of the CPA believe that even large juristic person franchisees (or wealthy natural person franchisees, for that matter) require the same extensive protection under the CPA as smaller or less wealthy juristic person or natural person franchisees? It appears to be because ‘the franchisee who is conceived as the “weaker party” should be protected from exploitation, overcharging and overreaching and from threats to its commercial existence[21]’, because of the ‘sunk investment’ by the franchisee into its franchise business, and the fact that the franchisor’s template franchise agreement is mostly non-negotiable.
(d) Why are franchisees treated as consumers at all under the CPA?
Indeed, even protecting franchisees in their role as consumers under franchise agreements through legislation appears to be ‘unique and unparalleled’[22] when compared to the approach in other countries. Instead, ‘in many countries of the developed Western world (and also the developed Eastern world – like China, Korea or Japan), where the modern franchise law has become an integral part of their commercial law of distribution…’ they would disapprove of this South African approach of treating the franchisee as a consumer, and not treat the franchisee and franchisor as being in a normal, commercial relationship entailing the sale and distribution of goods[23].
III THE CPA AND UNFAIR CONTRACT TERMS IN FRANCHISE AGREEMENTS
(a) How the CPA Governs Unfair Contract Terms in Franchise Agreements
Franchisees, in their capacity as consumers under franchise agreements, enjoy most of the protections recorded in Chapter 2 of the CPA which is entitled Fundamental Consumer Rights (there are only a few instances where franchisees are specifically excluded from the protection offered by a section in Chapter 2). Part G of Chapter 2 specifically deals with unfair contracts terms and is entitled ‘right to fair, just and reasonable terms and conditions’. And in instances where franchise agreements are specifically excluded from the application of a section or regulation in the CPA dealing with unfair terms (such as from Regulation 44, which records a list of presumptively unfair contract terms), courts could still be guided by such sections when dealing with franchise agreements.
Within Part G of Chapter 2, only the following sections apply to franchise agreements: section 48 (entitled ‘Unfair, unreasonable or unjust contract terms’, and which generally prohibits such terms), section 51 (entitled ‘Prohibited transactions agreements, terms and conditions’ which lists certain prohibited terms) and section 52 (entitled ‘Power of court to ensure fair and just conduct, terms and conditions’).
(b) Section 48 and 52 of the CPA
Section 48(1), in summary, prohibits the franchisor from:
- charging fees to franchisees at prices which are unfair, unjust or unreasonable;
- concluding a franchise agreement on terms that are unfair, unjust or unreasonable; or
- requiring the franchisee to waive any rights, assume any obligation or waive any liability of the franchisor on terms that are unfair, unjust or unreasonable.
Section 48(2) contains guidelines which the courts can take into account when determining if a term of, or an entire, franchise agreement, is unfair, unjust or unreasonable[24]. Under this sub-section, the term or the franchise agreement will be presumed to be unfair, unjust or unreasonable if:
- it is excessively one-sided in favour of the franchisor;
- the terms of the franchise agreement are so adverse as to be inequitable; the franchisees relied on false, misleading or deceptive representations or statements of opinion provided by or on behalf of franchisors, to their detriment; and
- the franchise agreements contained certain terms which should have been drawn to the franchisees’ attention and which were not.[25]
Reading section 48(2)’s guidelines together with what section 52 obliges a court to consider if it is deciding if a term in, or an entire franchise agreement, is unfair, unjust or unreasonable[26], recognised academics believe it may be ‘quite difficult’[27] for franchisees to convince courts, relying on the CPA, that the terms of their franchise agreements are unfair, unjust or unreasonable. Their reasoning is that the CPA is general purpose legislation and not designed to specifically deal with franchise agreements, and in addition, the imbalance of rights of the franchisee and franchisor in many instances ‘may be necessary to protect the legitimate interests of the franchisor or the network as a whole’[28].
In considering whether a term or a franchise agreement is unfair under the terms of the CPA, it has been recommended that courts take into account how other jurisdictions have formulated the concept of unfairness[29]. Consideration of appropriate foreign and international law when interpreting or applying the CPA is specifically allowed in section 2(2) of it.
It is also likely that courts will take into account the difference between negotiated, non-negotiated and core terms in a franchise agreement when they are determining fairness, and pronounce less easily on negotiated terms being unfair (although the CPA allows the courts to pronounce on negotiated terms). This is because the franchisee as a consumer would know what the negotiated and core terms are, and could have shopped around for better terms, negotiated those terms and/or refused them. This would align with the control of franchise agreement terms in other jurisdictions, which is of standard terms only (which are terms ‘prepared in advance for general and repeated use by one party, and which are actually used without negotiation with the other party’[30]) or of non-negotiated, non-core terms only[31]. Indeed Naudé writes that the CPA should have differentiated between the protection it offered to business-to-business versus business-to-customer contracts, and only allowed a challenge to a standard term ‘simply on the basis that they are unfair’[32] in business-to-business contracts, and only if such term ‘has not subsequently been changed in favour of the small business’[33]. She believes that relying on the common-law rule that contracts may not be contrary to public policy is a sufficient avenue for a party in a business-to-business contract (such as the franchisee) to challenge any negotiated terms[34]. This avenue of challenging a contract term under the common law is available to franchisees because the CPA expressly records in section 2(10) that the common law still applies in addition to the terms of the CPA, and a consumer retains any right it has under the common law.
(i) Accessing a Court under Section 52
The potential of the provisions of section 48 to influence the content of franchise agreements significantly and within a relatively short period of time since the CPA came into effect, is severely restrained by these two facts:
- that only ordinary courts are granted the power under section 52 to declare a franchise agreement or any of its terms unfair, unreasonable or unjust in terms of section 48[35]; and
- that a court may only grant an order under section 52 if the CPA ‘does not otherwise provide a remedy sufficient to correct the relevant prohibited conduct, unfairness, injustice of unconscionability’[36].
Section 69(1)(d) of the CPA records that a franchisee can not approach a court if all other remedies available to it in terms of national legislation have not been exhausted[37]. Section 69(1)(d) and section 52 seem to make it clear that a franchisee would first need to work its way through the processes offered by the alternative dispute resolution agents or consumer courts mentioned in section 69, although none of those bodies are empowered to make orders on unfair terms. If the franchisee can not, through those processes, agree to settle the disputes, it must wait to eventually come before the court so that the remedy available under section 52 can be utilised[38].
That provincial consumer courts or other institutions have not been given the same powers as ordinary courts in section 52 is therefore problematic, as a franchisee cannot quickly come before an ordinary court to seek this relief, nor have access to a less expensive option than having to approach a court[39] (because a franchisee’s claim would most likely fall outside the jurisdiction of the small claims court, and potentially also outside the jurisdiction of a Magistrate’s Court).
Nonetheless, despite the problems highlighted above, the CPA has increased a court’s control over unfair, unjust or unreasonable contract terms[40]. Franchisors are therefore advised to take note of the CPA and its requirements and adjust their franchise agreements accordingly, even if it may be difficult for franchisees to first access court under section 52, and secondly convince a court to declare a term unfair, unjust or unreasonable. Under section 52(3) of the CPA a court’s powers are wide, and it can make any order it considers just and reasonable in the circumstances.
(c) Unfair Contract Terms and the Common Law
A franchisee could apply to court to find a term in, or the entire franchise agreement, unfair on the basis that it is against public policy. However South African case law shows that there is little predictability of the outcome from cases in which courts have deliberated on illegality of a contract or contract term based on unfairness or unreasonableness using the standards of the public interest and public policy[41].
South African courts will generally uphold contracts strictly if they were properly consented to by the parties[42], but the courts have shown they are willing to consider applying:
[A] requirement of fairness and reasonableness to contractual terms and their enforcement, but only where constitutional values or clear objective aspects of public policy are directly unjustifiably affected, or where there is evidence properly before the court of subjective factors which would render enforcement of the contract against public policy (‘unconscionable’)[43].
Mere unfairness or unreasonableness of a term or agreement against one party does not alone suffice for it to be found to be against public policy[44].
A franchisee wishing the court to find a term in, or the entire franchise agreement, is against public policy based on the imbalance of bargaining power when the franchise agreement was concluded (amounting to procedural unfairness which violated public policy)[45], may struggle to succeed. There is always an imbalance of power between the franchisor and franchisee in franchise relationships which is necessary due to the franchising business model, and the franchisor needing to protect its goodwill for both its and the other franchisees’ benefit. As such it is believed ‘that the court will interfere when a person has no bargaining power, their autonomy is fatally impaired and the other party takes improper and unconscionable advantage of that position’[46]. Indeed, other jurisdictions have recognised that inequality of bargaining power in a franchise relationship is not a sufficient ground on its own to invalidate a contract.
One of South Africa’s most recent cases on point is Beadica 231 CC v Trustees of the Oregon Trust. It dealt with the public policy grounds on which a court may refuse to enforce contract terms[47]. It is a good example of the potential difficulty of relying on the common law to have a term of a franchise agreement, or its strict enforcement by the franchisor, held to be unfair. The case involved the cancellation of lease agreements by the lessor, as a result of the lessor (who was one of the respondents) strictly implementing the lease agreements’ terms. The applicants were the lessees under those lease agreements and also the franchisees under franchise agreements, and they operated their franchised businesses from the leased premises. The devastating knock on effect of the lease agreements being cancelled would be that the franchisor (which was indirectly related to the lessor, and one of the other respondents in the case) had the election to terminate the franchise agreements if the lease agreements for the approved location was terminated.
The applicants failed to renew their lease agreements strictly in accordance with the terms of their lease agreements, which required them to give written notice of their intention to renew the lease within a specified period. Three of the four applicants had sent notices to renew (in one form or another), but they were sent over a month late. One applicant had not sent any form of renewal notice. The lessor, acting on the basis that the lease agreements had not been renewed, but without communicating his position to the lessees that their late renewal attempts were not accepted or binding, then demanded that the premises be vacated at the end of the initial lease term. The franchise agreements gave the franchisor the right to terminate the agreements if the franchisees’ lease agreements for the approved locations were terminated. If the franchise agreements were terminated it would of course collapse the franchisees’ businesses.
The applicants sought relief from the court on the grounds that the ‘strict enforcement of the renewal clauses of the lease agreements would be contrary to public policy, or unconscionable in the circumstances of this case’[48], in light of the Constitution of the Republic of South Africa[49], and in particular the right to equality thereunder[50].
In the court’s judgement it confirmed that ‘public policy imports values of fairness, reasonableness and justice’[51], which ‘underlie and inform the substantive law of contract’[52] and those values can be used to ‘address deficiencies in the law of contract’[53]. Nonetheless, the court confirmed that the contractual term or its enforcement must be ‘so unfair or unjust that it is contrary to public policy that a court may refuse to enforce it’[54].
The applicants’ reasoning for not having complied with the strict requirements of the renewal clause in the lease agreements was that they were not sophisticated business people and not fully aware of their rights and obligations in respect of exercising the right of renewal. The court rejected this argument as the applicants had experience as business people, and were not ignorant individuals and the leases were clear and easy to understand[55]. It was unclear to the court why the applicants failed to give the proper and timeous notices of renewals.
The applicants reasoning for why allowing the strict enforcement of the renewal clause by the lessor would be against public policy was because their franchised businesses would collapse and the black economic empowerment initiative (financed by public money) which had financed their start up would have failed. The court found this not to be a sufficient basis to find that the enforcement of the renewal clause would be against public policy[56].
The applicants’ appeal from the Supreme Court of Appeal to the Constitutional Court therefore failed, and allowing the strict enforcement of the renewal clauses by the lessor was not found to be against public policy.
(d) Section 51 of the CPA and its ‘black list’
Section 51 of the CPA, which lists prohibited transactions, agreements, terms and conditions, records in subsection (3) thereof that a transaction, agreement, term or condition that contravenes section 51 is void to the extent of such contravention. Enforcement of this section 51 should be easier than enforcing a breach of section 48 because a complaint arising from a breach of section 51 can be referred to the National Consumer Commission for investigation, as it amounts to prohibited conduct under the CPA[57]. As punishment for prohibited conduct, a substantial administrative fine may be imposed on the franchisor in terms of Part C of Chapter 6 of the CPA.
The inclusion of this so called ’black list’ of prohibited terms in section 51 has been applauded as it ensures ‘fast, real, and effective consumer protection’[58]. This is because the black lists ‘promote self-imposed controls’[59] by the franchisors, and ‘expensive court action is therefore less likely to be necessary to challenge unfair terms’[60].
In addition to the ‘black list’ of prohibited terms in section 51, section 120(1)(d) of the CPA empowers the Minister to make regulations relating to unfair, unreasonable or unjust contract terms[61]. The Minister could therefore make lists of presumed unfair contract terms (being ‘grey list’ matters), such as the list recorded in Regulation 44 of the CPA which was mentioned briefly above. Such a grey list serves to place the onus of convincing a court of a term’s fairness on the franchisor. Other jurisdictions include non-exhaustive grey lists of presumptively unfair contract terms in their consumer protection legislation[62], and it would be relevant for our courts and other enforcement bodies to review which types of terms ‘have commonly been held to be so unfair that legislatures in a number of countries were prepared to brand them as always or usually unfair’[63].
Although, on the basis that franchise agreements are business to business contracts, a term in a franchise agreement should only fall within a black list or grey list if it was a standard term of the franchisor’s agreement which wasn’t subsequently changed to favour the franchisee, and not if it was a negotiated term[64].
IV CONCLUSION
Franchise agreements have been specifically brought under the ambit and protection of the CPA, which in all other cases does not apply to business to business supply relationships where the consumer is not a natural person or a juristic person with an asset value or annual turnover of at least two million rand. Chapter 2 of the CPA seeks to offer protection to franchisees by recording what are prohibited transactions, terms and conditions in Section 51, and what are, or may be, unfair, unreasonable and unjust terms in Section 48. However, it is believed that it will not necessarily be easy for a franchisee to have a franchise agreement or its terms declared by a court to be unfair in terms of Section 48 for the various reasons explained above. In addition, a franchisee can not directly access a court to seek relief regarding unfair terms under Section 48 because the CPA obliges various other dispute resolution processes have been attempted first. Nonetheless, a franchisee will potentially find greater success pursuing relief against unfair franchise agreements or their terms under the provisions of the CPA than by arguing that the agreement or term is against public policy in terms of the common law.
FOOTNOTES
[1] Franchise Association of South Africa ‘Franchising’s massive contribution to global economic output’ (2020) available at https://www.fasa.co.za/franchisings-massive-contribution-to-global-economic-output/#more-586643 accessed on 4 September 2022 at 1.
[2] Franchise Association of South Africa op cit note 1 at 4.
[3] Consumer Protection Act 68 of 2008.
[4] Biggs L ‘The franchise agreement as the cause of tensions between the franchisor and franchisee: has the Consumer Protection Act resolved the tensions?’ (2019) 31 SA Mercantile Law Journal 163 at 4, in which the author quotes from the Franchising Steering Committee published findings in 2000 Cancun Trading & Others v Seven-Eleven Corporation SA (Pty) Ltd (See footnote 9).
[5] Naudé T & Eiselen S (eds) Commentary on the Consumer Protection Act (2018) Juta, Cape Town at para 2 of RS 4, 2019, Franchising -1.
[6] ibid at para 8, of RS 4, 2019, Franchising -2.
[7] ibid at para 10, of RS 4, 2019, Franchising -3.
[8] ibid at para 9, of RS 4, 2019, Franchising -3.
[9] Biggs L op cit note 4 at 5, in which the author quotes from Cancun Trading & Others v Seven-Eleven Corporation SA (Pty) Ltd (See footnote 12). And see Naudé T & Eiselen S (eds) op cit note 5 at para 7, of RS 4, 2019, Franchising -1.
[10] Biggs L op cit note 4 at 173 and 199.
[11] Woker, TA ‘Franchising and restraints of trade – restraining ex-franchisees from competing with the franchise network’ (2005) Vol 26 (1) Obiter 1-13 at 2-3.
[12] Woker, TA op cit note 11 at 2-3.
[13] Woker, TA op cit note 11 at 3.
[14] Naudé T & Eiselen S (eds) op cit note 5 at para 11, of RS 4, 2019, Franchising -5.
[15] supra note 3 at section 5(6) and 5(7).
[16] Biggs L op cit note 4 at 200.
[17] Woker, TA op cit note 11 at 3, and see Franchise Association of South Africa available at https://www.fasa.co.za/ accessed on 4 September 2022.
[18] Adams & Adams ‘A New Franchise Industry Code for South Africa’ (2020) available at https://www.adams.africa/commercial-law/new-franchise-industry-code-south-africa/ accessed on 13 August 2022 at 3.
[19] Department of Trade, Industry and Competition, Republic of South Africa ‘Discussion Document: Publication of the Franchise Association of South (FASA) Industry Code “The Code”’ (2022) available at https://www.fasa.co.za/pdf/FASA-Discussion-revised-document-and-draft-Code_final.pdf accessed on 13 August 2022.
[20] supra note 3 at section 5(2)(b).
[21] Martinek M ‘The Franchise Relationship under South African Law, Tanya Woker: book review’ (2013) 2 Journal of South African Law 390 at 390-391.
[22] ibid at 390-391.
[23] ibid at 390.
[24] Naudé T & Eiselen S (eds) op cit note 5 at para 57, of OS, 2014, Franchising -21.
[25] Naudé T & Eiselen S (eds) op cit note 5 at para 57, of OS, 2014, Franchising -21.
[26] Section 52(2) of the Consumer Protection Act 68 of 2008 obliges a court to consider ‘(a) the fair value of the goods or services in question; (b) the nature of the parties to that transaction or agreement, their relationship to each other and their relative capacity, education, experience, sophistication and bargaining position; (c) those circumstances of the transaction or agreement that existed or were reasonably foreseeable at the time that the conduct or transaction occurred or agreement was made, irrespective of whether this Act was in force at that time; (d) the conduct of the supplier and the consumer, respectively; (e) whether there was any negotiation between the supplier and the consumer, and if so, the extent of that negotiation; (f) whether, as a result of conduct engaged in by the supplier, the consumer was required to do anything that was not reasonably necessary for the legitimate interests of the supplier; (g) the extent to which any documents relating to the transaction or agreement satisfied the requirements of section 22; (h) whether the consumer knew or ought reasonably to have known of the existence and extent of any particular provision of the agreement that is alleged to have been unfair, unreasonable or unjust, having regard to any- (i) custom of trade; and (ii) any previous dealings between the parties; (i) the amount for which, and circumstances under which, the consumer could have acquired identical or equivalent goods or services from a different supplier; and (j) in the case of supply of goods, whether the goods were manufactured, processed or adapted to the special order of the consumer.’
[27] Naudé T & Eiselen S (eds) op cit note 5 at para 59, of OS, 2014, Franchising -22.
[28] ibid at para 59, of OS, 2014, Franchising -22.
[29] Naudé T ‘The consumer’s right to fair, reasonable and just terms under the new Consumer Protection Act in comparative perspective’ (2009) 126 South African Law Journal 505-536 at 516.
[30] Naudé T & Eiselen S (eds) op cit note 5 at para 4, of RS 2, 2017, p 48-3.
[31] ibid at para 4, of RS 2, 2017, p 48-3.
[32] op cit note 29 at 534.
[33] ibid at 534.
[34] ibid at 534.
[35] Van Huyssteen LF, Lubbe GF, Reinecke MFB & Du Plessis JE Contract: General Principles 6 ed (2020) Juta, Cape Town at 259, and Naudé T op cit note 29 at 525.
[36] supra note 3 section 52(1)(b).
[37] ibid section 69(1)(d).
[38] Naudé T op cit note 29 at 525.
[39] ibid at 527.
[40] Naudé T & Eiselen S (eds) op cit note 5 at para 63, of OS, 2014, Franchising -23.
[41] For further discussion on case law see Van Huyssteen LF et al op cit note 35 at 253 to 256, and a more detailed discussion in Boonzaier L ‘Contractual fairness at the crossroads’ (2021) 11 Constitutional Court Review 229.
[42] Van Huyssteen LF et al op cit note 35 at 365.
[43] ibid at 373.
[44] ibid at 254.
[45] ibid at 256.
[46] Naudé T & Eiselen S (eds) op cit note 5 at para 60, of OS, 2014, Franchising -23.
[47] Beadica 231 CC v Trustees for the time being of the Oregon Trust [2020] ZACC 13.
[48] ibid para 10.
[49] Constitution of the Republic of South Africa, 1996.
[50] supra note 47 para 13.
[51] ibid para 72.
[52] ibid para 73.
[53] ibid para 75.
[54] ibid para 80.
[55] ibid para 93-4.
[56] ibid para 96.
[57] Naudé T & Eiselen S (eds) op cit note 5 at para 67, of OS, 2014, Franchising -25.
[58] Naudé T op cit note 29 at 520.
[59] ibid at 520.
[60] ibid at 520.
[61] supra note 3 section 120(1)(d).
[62] Naudé T op cit note 29 at 521.
[63] Naudé T op cit note 29 at 523. supra note 3 section 120(1)(d).
[64] Naudé T op cit note 29 at 522.
BIBLIOGRAPHY
Primary Sources
Statutes:
Constitution of the Republic of South Africa, 1996
Consumer Protection Act 68 of 2008.
Cases:
Beadica 231 CC v Trustees for the time being of the Oregon Trust [2020] ZACC 13.
Secondary Sources
Books & Journals
Biggs L ‘The franchise agreement as the cause of tensions between the franchisor and franchisee : has the Consumer Protection Act resolved the tensions?’ (2019) 31 SA Mercantile Law Journal 163.
Martinek M ‘The Franchise Relationship under South African Law, Tanya Woker: book review’ (2013) 2 Journal of South African Law 390.
Naudé T ‘The consumer’s right to fair, reasonable and just terms under the new Consumer Protection Act in comparative perspective’ (2009) 126 South African Law Journal 505-536.
Naudé T & Eiselen S (eds) Commentary on the Consumer Protection Act (2018) Juta, Cape Town.
Van Huyssteen LF, Lubbe GF, Reinecke MFB & Du Plessis JE Contract: General Principles 6 ed (2020) Juta, Cape Town.
Woker, TA ‘Franchising and restraints of trade – restraining ex-franchisees from competing with the franchise network’ (2005) Vol 26 (1) Obiter 1-13.
Other
Adams & Adams ‘A New Franchise Industry Code for South Africa’ (2020) available at https://www.adams.africa/commercial-law/new-franchise-industry-code-south-africa/ accessed on 13 August 2022.
Boonzaier L ‘Contractual fairness at the crossroads’ (2021) 11 Constitutional Court Review 229.
Department of Trade, Industry and Competition, Republic of South Africa ‘Discussion Document: Publication of the Franchise Association of South (FASA) Industry Code “The Code”’ (2022) available at https://www.fasa.co.za/pdf/FASA-Discussion-revised-document-and-draft-Code_final.pdf accessed on 13 August 2022.
Franchise Association of South Africa ‘Franchising’s massive contribution to global economic output’ (2020) available at https://www.fasa.co.za/franchisings-massive-contribution-to-global-economic-output/#more-586643 accessed on 4 September 2022.
Franchise Association of South Africa available at https://www.fasa.co.za/ accessed on 4 September 2022.
Krige Justine ‘A Brief Discussion on the Franchise Association of South Africa Industry Code’ (2020) Cliffe Dekker Hofmeyr available at https://www.cliffedekkerhofmeyr.com/en/news/publications/2020/corporate/corporate-and-commercial-alert-24-june-A-brief-discussion-on-the-Franchise-Association-of-South-Africa-Industry-Code.html accessed on 13 August 2022.