Shoprite Holdings has agreed to stop enforcing exclusivity clauses in its lease agreements.
“Importantly, this undertaking also applies to Shoprite Checkers' franchise business, OK Foods. Specifically, where Shoprite Checkers holds the lease on behalf of a franchisee, the undertaking will be implemented immediately,” said the commission.
“Where franchisees hold the lease, Shoprite Checkers and the commission have agreed that within a period of 12 months, Shoprite Checkers will work with its franchisees to ensure compliance with the undertaking. Shoprite Checkers will also ensure that its franchise agreements will in future not allow franchisees to hold exclusive leases.”
The commission welcomed the move by the retail giant, saying it would now see “much needed competition in the South African grocery retail sector”. “This move by Shoprite Checkers is timely considering the devastating impact of the corona virus pandemic on the South African economy in general, and specifically the retailing and retail property sectors,” said commissioner Tembinkosi Bonakele.
“Even more encouraging is the leveling of the playing field between independently-owned small grocery retailers and the small franchise operators that benefit from the bargaining power that comes with their association with the well-established brands of the national supermarket chains.”
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