Franchisers want an industry ombud

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The failure by the government to move on the establishment of a franchise ombud is a “huge bone of contention”, says Franchise Association of SA executive director Vera Valasis. “You can get up in the morning and start selling franchises [with impunity]”

That’s according to Franchise Association of SA executive director Vera Valasis, who was speaking to City Press at the 21st International Franchise Expo in Durban this week.

This means small investors who sink their savings into a franchise have few places to turn to if they get a raw deal or the business goes belly up, which happens on a “fairly regular basis”. Like the rest of the economy, Valasis said the franchising sector was facing tough trading conditions. Billy Constantinou, a franchise broker specialising in restaurants, believed many of the bigger franchises were arrogant and dictated terms, while some of the smaller ones were “almost chasing short-term joining fees and royalties”.

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