Franchisees are still considered independent contractors. The relationship between a franchisee and a franchisee is complicated and can have several effects. This independent contractor is neither the franchisee`s employee nor the agent. Instead, the franchisee is in business for himself. They pay their own taxes. They have the freedom to hire everyone. They are the employers of their employees and usually work independently of each other in the performance of the contract between them. In addition to standard provisions such as timely payment, that clause should contain provisions allowing the franchisee to terminate the contract if the franchisee does not act in accordance with the operations and procedure manual; does not work or does not meet the wrong quality standards. Unfortunately, many of the above-mentioned provisions in franchise agreements and franchise systems that concern the Competition Commission are essential and very often the reasons for the success of franchises. However, the government has recognised that franchising is a viable way to promote the development of small and medium-sized enterprises in South Africa and a new Franchising Act has been drafted to introduce certain rules for the franchising sector.
FASA has made substantial recommendations that, indeed, are not very different from EASA`s approach and practices for many years, namely ethical franchising and the protection of the interests of both parties in the perspective of an ongoing win-win situation, associated with the development of franchising in general. Confidentiality agreements should be signed by the competent staff of franchisee organisations in order to protect the know-how, trade secrets and confidential information of the franchise system. These clauses could also be included in employment contracts. This allows the franchisee to know how long the franchise agreement is valid, from the date of the contract. They are also asked to do for the new extension if there is a clause for a . . .