Legal Requirements under the Consumer Protection Act (CPA)
Legal Requirements under the Consumer Protection Act (CPA)
What specific disclosure and contract requirements are mandated for South African franchisors under the Consumer Protection Act (CPA)?
2 Answers
Under South Africa’s Consumer Protection Act, franchisors must provide a franchise disclosure document detailing fees, obligations, and material risks at least 14 days before signing. Contracts must be written, clear, and fair, allowing the franchisee to cancel within the prescribed cooling-off period, ensuring transparency and informed consent.
Under South Africa’s Consumer Protection Act (CPA), franchisors must give prospective franchisees a full disclosure document and the franchise agreement at least 14 days before signing, including clear details on fees, royalties, territorial rights, risks, financial projections (with disclaimers), and past litigation or failures. The contract must also include cooling-off rights (10 business days), plain-language terms, and fair termination clauses. Emotionally, these rules feel reassuring they’re there to slow things down, shine a light on the fine print, and protect buyers from being rushed into a deal they don’t fully understand.