As a Franchisor, it would always be our goal to assist any of our Franchisees who are experiencing problems, be they financial, technical, or managerial, and to resolve these long before any step-in right becomes necessary.
The Franchisor’s step-in right is a protective right giving the Franchisor authority when the Franchisee is in breach of contract or in the process of going insolvent. The right is given in favour of the Franchisor to protect the brand as well as other franchisees, provided that the Franchisor has not contravened the regulations of the Consumer Protection Act.
Should the step-in right become necessary, the Franchisor has the right to step into the position of Principal and Manager of the franchise and in such a capacity to save and protect its brand and organisation.
There are no specific regulatory requirements the Franchisor needs to follow in order to exercise the step-in right.
