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A New Legal Landscape for Franchising in South Africa

By Kendal Tyre
August 26, 2009

South Africa's Consumer Protection Act (“Act”) will have a significant impact on franchising in that country. The president of South Africa signed the new legislation into law on April 24, 2009, and it was published in the government gazette on April 29, 2009. The Act codifies many franchise practices that have been advocated by the Franchise Association of South Africa (“FASA”) since the early 1990s and expands on existing provisions of South Africa's Competition Act, 1998.

With more than 500 franchise systems operating in the country, franchising in South Africa has emerged as one of the key vehicles through which companies choose to expand their operations. The franchising industry contributes approximately 12% of South Africa's gross domestic product.

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