Abstract

This article focuses on the controversial issue of franchise agreement termination with particular reference to the petroleum sector. Although franchisees are said to ‘own’ their own businesses, it is never intended that they will have access to the franchisor’s trademarks and other intellectual property on a permanent basis. The franchise relationship will eventually terminate. The question then arises: who owns the goodwill of the particular franchise outlet operated by the franchisee – franchisee or franchisor? The issue of goodwill has arisen in a number of petroleum sector related cases recently, including the Constitutional Court, and although the courts have referred to goodwill, the question has not been definitively addressed. This article seeks to show why the issue of goodwill is a complicated issue in the context of franchise termination, how goodwill is traditionally dealt with in franchise agreements and to make some suggestions going forward. This topic is complex especially since it is not always easy to distinguish national or international goodwill from local goodwill. The two are deeply entwined. So, there is a need for further and more detailed research. This article is intended to start the debate.