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Lenasia Business Granted Interim Relief After Franchise Agreement Battle

May 03, 2021

Faizel Patel – 03/05/2021

(Twitter: @FaizelPatel143)

The Johannesburg High Court has granted interim relief to a business in Lenasia after a franchise agreement battle.

Judge Faeeza Kathree Setiloane upheld an application brought by Superb Steel who trades as Incredible Money against Cash Crusaders for interim stay on writ of execution.

Four applications were brought by Incredible Money before courts.

The case stems from Superb Steel’s decision to terminate their franchise agreement with Cash Crusaders owing to the fact that the franchisor allowed three other stores to be opened in close proximity to each other.

An arbitration award was handed down confirming the cancellation of four franchise agreements which Cash Crusaders had entered into with Superb Steel, and directing Superb Steel to pay about R11 million in damages to Cash Crusaders for the early termination of the franchise agreement.

In the judgement, Judge Kathree Setiloane ruled that a matter arising in the Western Cape High Court between the two parties has to be brought to finality before any decision can be made on the current applications.

Judge Kathree Setiloane said there the arbitrator failed in the duties to determine a reasonable quantification for damages and referred it back for revaluation.

The Judge also pointed out the arbitrator was not made aware of the fact that three Cash Crusader stores were opened up in close proximity to each other and whether it was in line with the franchise agreement.

“Cash Crusaders has instead taken the law into its own hands, by executing the warrant on movable property of three self-standing and separate legal entities from Superb Steel. Such conduct cannot be countenanced. For these reasons, I find that the three Applicants have made out a case for the relief that they seek.”

The Sheriff has also been ordered not to attach and return any property of Incredible Money.


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