How to Franchise Your Business in South Africa (Agencies, Distributorship, Licencing & the Important Differences) [2 Min Read]
The first and most critical aspect to understand is these are all methods when it comes to wanting to franchise your business in South Africa, essentially business marketing methods that help greatly when wanting to create a franchised brand out of your business.
1. Franchising Agencies
A franchising agency or a specialised franchise consultant are key elements when looking to franchise your business. When integrating your business into a franchise, the consultancy or franchise specialist will act for and on behalf of you or your business when you are looking to franchise your business. We call them ‘The Principal.’ The franchising agent will represent you or your brand in all commercial franchising transactions. This binds you - the principal when you want to franchise your business and you are liable for omissions and defaults of the franchise agent. The brand consultant or franchising consultancy defaults are to: Act with the authority of the principal and doesn’t take title to the good distributorship, where a franchise consultant acts on your behalf and the distributor acts on his own behalf when you franchise your business.
There is a moment in the buying & selling chain where the distributor becomes the owner of the principal’s goods.
When you franchise your business, this is a relationship whereby a re-seller would sell your goods to his own customers. It is not a relationship where you would bind the re-seller when you franchise your business. This would typically occur when you are signing the franchising agreement with your chosen franchise consultancy.