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How do I Go About Increasing Prices in My Franchise?
Frequently Asked Questions about price Increases

Franchise Finder

With the start of the calendar year upon us and a new financial year fast approaching, many franchises will be thinking about raising the prices of their services or goods. Increasing prices can often be contentious, particularly in tough times. Bear the following in mindÖ

What Does the CPA Say About Price Increases?

The Consumer Protection Act No. 68 of 2008 refers to consumers rights in respect to the Disclosure of Price of Goods or Services. In terms of this Act, communication of pricing to customers should be crystal clear to avoid disputes. In a nutshell, customers not adequately informed of price increases are entitled to pay the lower (older) price for goods or services Ė for example, if they have a catalogue or price list advertising certain rates and an expiry date is not expressly stated (and they havenít received notice of new pricing) or if they find a product in a shop with an old price tag.

Must I Give Notice of Price Increases?

In some franchise business, e.g. retail franchises, where price increases are frequent, sellers should take care to ensure that price changes are uniformly applied to all units and that prices on the products themselves agree with those listed on the shelf labels and on other promotional materials. The Act also requires sellers to take all reasonable steps to inform consumers of any errors in pricing and the correct prices.

For those franchise business where price increases are less frequent, undertaken on an annual basis, for instance, itís not only good business practice to inform customers of the price hike, but good manners, too. Draft a polite letter informing customers of the price increase and briefly state the reasons behind the increase. Be sure to attach your new pricing schedule and let customers know when it takes effect. A notice period of one calendar month should suffice.

Author: Franchise Finder, Online Directory of Franchises and Business Opportunities in South Africa


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