If you are a business owner and you want to start a franchise, or buy a franchise, you will need a franchise attorney to setup a franchise contract that is lawful within the scope of statutory and common law contractual requirements. Both parties must have contractual capacity to enter into an agreement and the franchise relationship will mostly be controlled and governed by the contract (also called a franchise agreement).
How a franchise contract is setup depends on the type of franchise being bought and sold. No franchise contract is the same and there will be provisions in the contract that will have a direct impact on how you run your business. The franchise contract may regulate all business aspects such as store furniture, signage and decor to shop location.
Franchise contracts should typically specify the manner and method of operations, business system requirements, suppliers, advertising specifications, etc – we call this a Franchise Operations Manual. This operations manual incorporates information essential to the running of a franchise such as:
Initial training for new franchisees.
Support and references for established franchisees.
Quality control document to enforce standards.
Suggested retail prices.
Overview of responsibilities – A typical franchise operations manual (sometimes multiple documents) should contain descriptions and specified details of the franchisor’s standards of operations.
Franchise Association of South Africa
FASA is the governing body of franchising in South Africa that promotes ethical franchising. It is advisable for all franchisors to become registered members of FASA to show commitment to good ethical policies and business practices. The FASA objective is to protect both franchisees and franchisors.