Company: KARO
Filing Date: 2025-06-09
Form Type: 20-F
Source: 0001213900-25-052372
Chunk: 16

Company: Karooooo Ltd.
Filing Date: 2025-06-09
Form: 20-F
Item: Item 3
Chunk 16
---
 the action acted lawfully
and in compliance with the policies and procedures outlined in our service level agreement with the service provider, there can be no
assurance that a later determination will not find fault on the part of such security personnel.

In light of the nature of SVR
operations, future incidents in which force is required are likely to occur. If the security officers engaged in such SVR operations are
found to be at fault in any similar incident in the future, it could result in civil and/or criminal liability for us, including monetary
damages or other penalties. Even if we are not found liable, we could suffer reputational harm if we are negatively associated with such
incidents. While we have policies and procedures in place governing the use of force by our service provider, there can be no assurance
that these policies and procedures, even if followed, would entirely mitigate any resulting reputational harm or civil and/or criminal
liability that may result from an incident.

Our financial results are affected directly by the
operating results of our licensees and their employees, over whom we do not have direct control.

Our operations in Botswana, Malawi,
Rwanda and Zimbabwe, which are conducted by independent businesses that are licensees pursuant to franchise agreements with us, comprised
0.1% of our revenue for the financial year ended February 28, 2025 and 0.1% of our revenue for the financial year ended February 29, 2024.
Our licensees generate revenue in the form of hardware and subscription revenue billed to customers. Accordingly, our financial results
depend in part upon the operational and financial success of our licensees. We may have to terminate licensees due to various reasons,
including non-payment. Additionally, if licensees fail to renew their license agreements, or if we decide to restructure license agreements
in order to induce licensees to renew these agreements, then our revenues may decrease and profitability from new licensees may be lower
than in the past due to reduced royalties and other incentives we may need to provide.

We rely in part on our licensees
and the manner in which they operate their locations to develop and promote our business in Botswana, Malawi, Rwanda and Zimbabwe. Although
we have developed criteria to evaluate and screen prospective licensees, we cannot be certain that our licensees will have the business
acumen or financial resources necessary to operate successful businesses in their franchise areas and local laws may limit our ability
to terminate or modify these franchise agreements