Consumer Protection Act & Regulations
The provisions of the new Consumer Protection Act came into effect on 1 April 2011. Many South Africa franchises are based on long running agreements between franchisors and franchisees. Outdated franchise agreements may soon be declared invalid by reason that they may be found to be contrary to current South African legislation. The Consumer Protection Act 68 of 2008 and the Competition Act 89 of 1998 contain specific provisions that may be contrary to well established franchising principles. Fixed pricing structures and exclusive territories may contravene the provisions in the Competition Act. Restrictive purchase conditions may also contravene the provisions in the Consumer Protection Act. Franchisors are therefore advised to review their franchise agreements in light of the applicable legislation.
Consumer Protection Act
Consumer Protection Act promotes a fair, accessible and sustainable market place for consumer products and services which establishes national norms and standards relating to consumer protection, provides improved standards of consumer information and prohibits certain unfair marketing and business practices. The Consumer Protection Act promotes responsible supplier behaviour as well as consistent legislative and enforcement frameworks relating to consumer transactions and agreements.
Legislation and Business Regulation
The DTI (Department of Trade and Industry) develops and reviews regulatory systems in the areas of competition, consumer protection, company and intellectual property, as well as public interest regulations. The Department of Trade and Industry also oversees the work of national and provincial regulatory agencies mandated to assist the DTI in providing competitive and socially responsible business and consumer regulations, for easy access to redress and efficient markets.
Advice & Services
Smit & Van Wyk, Inc. legal services include giving advice to businesses and franchises on competition, consumer protection, company and intellectual property matters.