Prominent international food and beverage franchises as well as fashion and apparel franchises maintain significance in the local market. However, due to economic challenges and a weak exchange rate, some foreign franchisors encounter difficulties with their local franchisees.
The health and education sectors have shown notable growth. Despite a tough economy, the franchising sector has maintained its steady growth and adaptability, managing to attract global franchise brands. This is the opinion of Danie Strachan and André Visser, Partners at Adams & Adams, in their latest assessment of the developments in the franchising market in South Africa, as part of the Thomson Reuters Practical Law Series.
Most foreign franchisors prefer to enter the South African market by way of master franchise agreements or, in some cases, area development franchises. Some franchisors also enter into joint ventures with local parties due to the imperatives of complying with black economic empowerment legislation. This is particularly relevant in the case of organisations that wish to do business with the South African Government. To download the South Africa Chapter on Franchising, CLICK HERE.
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Reproduced with permission from Thomson Reuters Practical Law 2018 and the Associations of Corporate Counsel.