At the same time, local entrepreneurs and domestic companies are entering and expanding into the business world. That is why this contribution describes the main laws and regulations that the franchisee and the franchisee should respect. Franchise agreements have obligations after termination that oblige the franchisee not to open a similar/competitive business for a given period of time. The application of these clauses is governed by the interpretation of the legislator and the court. Ideally, the Trade Restrictions Act prohibits the imposition of inappropriate conditions. In addition, courts disapprove of restraint clauses that favour one party or tend to deter the other party from seeking employment. See, for example, LG Electronics Africa Logistics FZE v Charles Kimani and Credit Reference Bureau Holdings Ltd v Steven Kunyiha. When developing restrictive clauses, the parties should have a limited business, have a defined customer area and have an appropriate limitation period. Nairobi, Kenya is the international hub of East Africa and the Central African Republic. Increasing the purchasing power and desire for American brands offers opportunities for American franchises in Kenya.
Despite the lack of a single national framework, the local franchising market has grown exponentially. Growth has been influenced by many reasons, including an appropriate IP framework that is TRIPS-compliant. In addition, the courts are actively committed to protecting the rights of the franchisee and franchisee. Recently, the court awarded $17,000,000 in damages to a local merchant for unlawfully terminating a distribution contract.