Transactional
Franchising, agency and distribution
We advise brand owners, franchisors, franchisees, principals and distributors on the agreements through which products and services reach their markets.
Overview
The way a business takes its products and services to market determines much of its risk and much of its value. We advise on franchise systems, commercial agency, distribution and private label arrangements, and the regulatory frameworks that apply to them, for clients on both sides of these relationships.
Franchise agreements in South Africa are subject to specific requirements under the Consumer Protection Act and its regulations, including prescribed content and disclosure. Distribution and agency arrangements raise their own questions of exclusivity, territory, pricing and competition law. We bring these considerations together into agreements that are commercially workable and regulatorily sound.
Our distribution work frequently extends across borders, and draws on our cross-border, intellectual property and commercial contracts work.
Services
What the work involves
Franchise systems
We advise franchisors on the structure of their franchise system and prepare franchise agreements, operations manual provisions and disclosure documents that meet the requirements of the Consumer Protection Act. We address fees and royalties, territory, brand standards, renewal and exit.
Advice to franchisees
We review franchise agreements and disclosure documents for prospective franchisees and explain the commitments involved, including fees, restraints, renewal rights and the consequences of termination, before the franchisee commits capital. An informed decision at the outset is the most effective protection a franchisee has.
Commercial agency
We draft and negotiate agency agreements, including the scope of authority, commission structures, exclusivity and the agent's obligations, and advise principals and agents on their respective positions. Clear definitions of authority and remuneration avoid the disagreements that most often arise in agency relationships.
Distribution agreements
We prepare exclusive and non-exclusive distribution agreements, covering territory, minimum purchase commitments, pricing, marketing obligations, product liability and termination. We give particular attention to post-termination provisions, including stock and customer relationships.
Private label and OEM arrangements
We advise on private label and original equipment manufacturer arrangements, including specifications, quality control, brand ownership, regulatory responsibility and the allocation of product liability risk. We make sure that intellectual property in the products and their packaging is clearly allocated.
Competition considerations
We identify provisions in franchise, agency and distribution arrangements that may raise competition law concerns, such as resale price provisions and certain exclusivity arrangements, and structure agreements to manage that risk. We draw on our competition advisory work where a more detailed assessment is required.
Consumer protection compliance
We advise on the consumer-facing obligations that attach to products and services sold through these channels, including disclosure, warranties and returns, and on how responsibility is allocated along the supply chain. Clarity on these obligations protects both the brand and the relationships along the distribution chain.
Who we work with
Franchisors developing or expanding a franchise system; prospective and existing franchisees; brand owners appointing agents and distributors; distributors taking on new product lines; and manufacturers supplying private label products.
How we work
Commercially grounded
We design agreements around how the network will operate and earn revenue.
Regulatory awareness
Consumer protection and competition considerations are addressed at the drafting stage.
Balanced durability
Agreements are drafted to sustain long-term relationships while protecting each party's essential interests.
Common questions
Does a franchise agreement have to contain particular terms?
Yes. The Consumer Protection Act regulations prescribe certain content and disclosure for franchise agreements. We make sure your agreement and disclosure document meet those requirements.
Technically sound. Commercially minded.
Advice that begins with technical precision and extends to the commercial and strategic judgement that founders, owners and executives rely on.