While the Viljoens are living it up in Miami, Tammy Taylor franchisees in South Africa are wondering what will happen to them.
Now that Peet and Melany Viljoen left the country, their Tammy Taylor franchisees have been left in the lurch.
The principal franchisor, the Viljoens’ Tammy Taylor Global Franchising, has left the country, but the salons still carry the Tammy Taylor brand name and logo despite South African and US courts forbidding the Viljoens from continuing to use it.
Where does that leave the franchisees?
Trudie Broekmann, a consumer lawyer from Cape Town and expert on the Consumer Protection Act (CPA), says a franchise operation can generally not operate without an engaged national franchisor which properly holds the legal rights to act as franchisor.
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The CPA’s provisions regarding franchises were used in the application for an order against the Viljoens and Tammy Taylor Global Franchising recently, when Lebohang Hlathuka asked to be refunded the R600 000 she paid for a franchise. The court also ruled that the Viljoens be barred from using the Tammy Taylor brand name any longer.
Tammy Taylor franchisees left to fend for themselves
Broekmann says, from Hlathuka’s recent judgment against the Viljoens, it is clear that at least those “franchisees” who recently acquired their franchises from the Viljoens’ entities do not have a valid franchise.
“These franchises would have to be reacquired or otherwise regularised by either a South African franchisor with a valid right for the relevant territory or with Tammy Taylor in the US.
ALSO READ: US court rules Viljoens must pay real Tammy Taylor R71 million
“If earlier franchisees acquired their franchises validly from the Viljoens while they were authorised by Tammy Taylor to sell franchises, those franchisees have also been left in the lurch by the Viljoens’ sudden departure.
“The older franchisees will have to negotiate new channels for their supplies and support. Even successful legal prosecution generally cannot rectify the devastation left behind by fraudsters. I can only commiserate with the non-complicit staff, franchisees and even customers of the franchisees who have been left to fend for themselves.”
Judgment in US court against Viljoens
A US court also issued an order at the end of June after the real Tammy Taylor sued the Viljoens for trademark infringement and breach of contract. The US judge ordered that the Viljoens’ US Trademark Registration be cancelled and that Taylor’s request for the maximum in statutory damages of $4 million against the Viljoens for counterfeiting the US-registered trademarks and breach of contract is granted.
In addition, the judge ordered the Viljoens to scrub all references between them and the Tammy Taylor brand, including their website, from the internet.
ALSO READ: Viljoens say Tammy Taylor will not get her R71 million [VIDEO]
How do these judgments affect the Tammy Taylor franchisees in South Africa?
Broekmann says the truth is that the franchisees are in a bind and there is probably not much they can do.
“Considering the rulings by the South Gauteng High Court and the California District Court in the US, it is clear that the Viljoens and their entities did not have the right to sell Tammy Taylor franchises since April 2022.
“Therefore, any ‘franchisee’ or potential ‘franchisee’ who contracted with them is entitled to claim their money back, along with damages. If these ‘franchisees’ attempt to conduct business as a Tammy Taylor salon they will be legally unauthorised and open themselves to being sued by Tammy Taylor Nails Inc in the US for breach of its intellectual property rights.
“I would suggest they instruct legal representatives to act very quickly to ensure that the Viljoens’ assets are not dissipated or removed from the country to evade payment.”
What can the Tammy Taylor franchisees do now?
Broekmann says even the legitimate franchisees, who transacted with the Viljoens between April 2017 and April 2022 while they were authorised to sell franchisees, were left in the lurch by the Viljoens’ hurried departure from South Africa.
“I assume their companies will not operate for much longer. I suggest the franchisees contact Tammy Taylor Nails Inc in the US to negotiate arrangements for support and supply of the correct Tammy Taylor products. Of course, there is no guarantee that the US company will be willing to support the South African franchisees and if so, at what cost.”
ALSO READ: Judge orders Viljoens to immediately stop using Tammy Taylor trademark
She says she has been inundated with requests for help from South African consumers who are victims of con artists and fraudsters. “This judgment is a move in the right direction and demonstrates that our courts will come to the assistance of those who fall victim to business people who behave in contravention of the law, in particular the CPA, which regulates franchising.”
Be careful if you want a franchise, lawyer warns
Broekmann recommends that consumers who want to invest in a franchise involve an attorney to assist them throughout the process, as there are many potential pitfalls.
“The CPA requires a franchise agreement to be in writing and signed by the franchisor as well as the franchisee, but Hlathuka was forced to pay R600 000 before the contract was in place for a ‘franchise opportunity that never existed’.”
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