Competition Commission Proposes Franchise Market Inquiry

Posted 26 June 2026 Written by Acts Online
Category Trade

Brought to you by SA Legal Academy: The Competition Commission has announced its intention to conduct a market inquiry into the South African franchise sector and has called for public comments on the draft terms of reference.

In terms of Section 43B of the Competition Act, No. 89 of 1998, the Commission may conduct a market inquiry if it has reason to believe that any feature or combination of features of a market prevents, distorts, or restricts competition. The deadline for submitting written representations on the draft terms of reference is 7 August 2026.

The decision to initiate this inquiry follows widespread complaints regarding barriers to entry and meaningful participation within the franchising sector, particularly for aspiring entrepreneurs and individuals from historically disadvantaged communities. The scope of the inquiry is expected to examine structural and conduct-related factors, including:

  • Unfair or restrictive clauses in franchise agreements;
  • Barriers preventing historically disadvantaged persons from entering the market;
  • Supply chain constraints and preferred supplier arrangements that limit competition; and
  • The distribution of risk and operational control between franchisors and franchisees.

What this means for you, your business, or your clients

  • For yourself: Stay informed of the evolving regulatory framework governing commercial agreements and competition law in the franchising sector to provide accurate, up-to-date counsel.
  • For your business: If your firm advises on or operates franchise models, review current franchise agreements and disclosure documents to identify clauses that may attract regulatory scrutiny under competition principles.
  • For your clients: Advise franchisor and franchisee clients on the potential impact of the inquiry, assist them in auditing their operational structures, and prepare formal submissions to the Commission before the 7 August 2026 deadline.

Originally published at https://legalacademy.co.za/news/read/franchise-market-inquiry-input-sought-on-draft-terms-of-reference

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