The Business Practices Committee (the Committee) was established in terms of section 2 of the Harmful Business Practices Act, 71 of 1988 ("the Act"). The purpose of the Act is to provide for the prohibition or control of harmful business practices and for matters connected with this. A "harmful business practice " is any business practice that, directly or indirectly, has or is likely to have the effect of harming the relations between businesses and consumers, unreasonably prejudicing any consumer or deceiving any consumer. The Committee reports to the Minister of Trade and Industry (the Minister).

In terms of the Act the Committee could undertake a section 4(1)(c) or a section 8(1)(a) investigation into the business practices of a particular entity or individual. A section 4(1)(c) investigation enables the Committee to make such preliminary investigation as it may consider necessary. The Committee can also confer with any interested party in connection with any harmful business practice which allegedly exists or may come into existence. Notices of section 4(1)(c) investigations are not published in the Government Gazette as opposed to section 8(1)(a) investigations. The purpose of section 4(1)(c) investigation is to enable the Committee to make a more informed decision as to whether a section 8(1)(a) investigation is called for.

After undertaking a section 4(1)(c) investigation the Committee had reason to believe that Simply Bellissimo CC (96/31346/23) and its members, John Kenneth Kilian (Kilian) and Janet Alison Kilian (Ms Kilian) might be involved in a harmful business practice. They marketed a "franchise opportunity". The notice of the section 8(1)(a) investigation was announced by Notice No. 432 in Government Gazette No. 19836 published on 19 March 1999.