Company: KARO
Filing Date: 2025-06-09
Form Type: 20-F
Source: 0001213900-25-052372
Chunk: 17

Company: Karooooo Ltd.
Filing Date: 2025-06-09
Form: 20-F
Item: Item 3
Chunk 17
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. Moreover, despite our training, support and monitoring, licensees may not successfully
operate in a manner consistent with our standards and requirements or may not hire and train qualified employees. The failure of our licensees
to operate their franchises successfully could have a material adverse effect on us, our reputation, our brand and our ability to attract
prospective licensees, which could have a material adverse effect on our business, financial condition or results of operations.

Our licensees and their employees
could take actions that could harm our business.

Our licensees are independent
businesses and the employees who work for them are not our employees, nor do we exercise control over their day-to-day operations. Our
licensees may not operate their businesses in a manner consistent with industry standards or may not attract and retain qualified employees.
If licensees were to provide diminished quality of service to customers, engage in fraud, misappropriation, misconduct or negligence or
otherwise violate the law, including with respect to any laws relating to sanctions, our brand and reputation may suffer materially, and
we may become subject to liability claims based upon such actions of our licensees and their employees.

Brand value can be severely damaged
even by isolated incidents, particularly if the incidents receive considerable negative publicity or result in litigation. Some of these
incidents may relate to the way we manage our relationship with our licensees, our growth strategies or the ordinary course of our business
or our licensees’ business. Other incidents may arise from events that are, or may be, beyond our control and may damage our brand,
such as actions taken (or not taken) by one or more licensees or their employees relating to health, safety, welfare or other matters,
litigation and claims, failure to maintain high ethical and social standards for all of our operations and activities, failure to comply
with local laws and regulations and illegal activity targeted at us or others. Our brand value could diminish significantly if any such
incidents or other matters erode consumer confidence in us, which may result in a decrease in our revenue, which in turn would materially
and adversely affect our business, financial condition and results of operations.

We depend on certain key
suppliers and vendors as part of our hardware manufacturing process. An interruption in the supply chain could impair our product availability,
thereby adversely affecting distribution and growth.

The manufacturing of our core
hardware requires advanced production planning, including the purchase of specific components and evaluation of component-related design
elements. We currently purchase the latest Global System for