Woolies has commenced discussions with their South African franchisees about the future of Woolies local franchise business. After informing franchisees that it would be stopping its local South African franchise business, Woolies offered to buy all local franchises at fair value. The franchisees and Woolies have commenced discussions to agree guiding principles for valuation. Once these principles are agreed, Woolies final offers to buy will be in place until they expire on 30 June 2011. The total value of this investment, if all the offers made to the franchisees were accepted, would not be material. Upon the sale of any franchise business to Woolies, Woolies have committed to employing all franchise store managers and staff. Woolies noted that the key factors in reaching the decision to stop franchising were that it had become increasingly more complex and expensive to operate a separate franchise business model with its own systems and processes.