Insights Header image
Insights Header image
Insights Header image

Big Changes Coming to Canadian Franchise Legislation

April 2016 Franchise Bulletin 2 minute read

Three provinces are expecting big changes in the area of franchise legislation, some of which will be more welcomed by franchisors than others:

Ontario

Ontario is proposing an amendment to Regulation 581/100 under the Arthur Wishart Act (Franchise Disclosure) (the “AWA”) that would make it easier for Franchisors to provide disclosure documents to prospective franchisees.

Currently, there are only two ways franchisors can deliver disclosure documents to prospective franchisees: either personally or by registered mail. The proposed amendment would allow a disclosure document to be delivered by courier or electronically.

The proposed amendment states that if the disclosure document is delivered electronically, its format must allow the recipient to view, store, retrieve and print it. The disclosure document also cannot contain links to external documents or content. If the disclosure document consists of separate electronic files, it must include an index listing the file names. Finally, electronic delivery will not be complete until the franchisor receives electronic acknowledgment of receipt from the prospective franchisee.

This amendment will make the AWA consistent with franchise legislation in Prince Edward Island, Manitoba, and New Brunswick, which already permit disclosure documents to be delivered electronically.

The proposed amendment also provides for the delivery of a notice of rescission by pre-paid courier.

The Ministry of Government and Consumer Services is seeking comments on the proposed amendment until May 2, 2016. Comments may be sent to the Ministry by emailing [email protected].

Alberta

In Alberta, the government is considering removing an exemption in the Franchises Act that affects “mature” franchisors. Currently, franchisors meeting certain criteria of size and net worth and who have a proven track record are not required to disclose financial statements in their disclosure document to prospective franchisees.

If the amendment passes, mature franchisors will lose this exemption, making Alberta’s Franchises Act inconsistent with other provincial franchise legislation, including Ontario.

British Columbia

As we reported in our November 2015 bulletin, British Columbia’s Franchises Act received royal assent in November 2015. It is expected to come into force by the end of 2016. The legislation will bring B.C.’s franchise regime in line with other Canadian jurisdictions. It remains unclear when, specifically, B.C. will proclaim its franchise legislation into force.

by W. Brad Hanna and Cara Zacks

A Cautionary Note

The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

© McMillan LLP 2016

Insights (5 Posts)View More

Featured Insight

The “Due Care” Standard for Payment of Annual Patent Maintenance Fees

In Taillefer v. Canada (AG), the Federal Court considered the scope of the “due care” standard regarding the payment of annual patent maintenance fees.

Read More
Feb 28, 2024
Featured Insight

Two-Year Anniversary of Russia’s Illegal Invasion of Ukraine: New Sanctions Designations and Expansion of Export Prohibitions

To coincide with the two-year anniversary of Russia's invasion of Ukraine, Canada announced new sanctions and financial reporting obligations.

Read More
Feb 28, 2024
Featured Insight

2024 Changes to Canada’s Thresholds for Merger Notification and Investment Canada Act Reviews

Providing updates on the 2024 merger thresholds under Canada's Competition Act and Investment Canada Act.

Read More
Feb 28, 2024
Featured Insight

Adjudication Under the Construction Act: Fast but Fair

Adjudicator discretion under the Construction Act. Ontario Court recently confirmed a limit on this discretion in Ledore Investments v. Dixin Construction

Read More
Feb 23, 2024
Featured Insight

Environmental Protection: An Essential Consideration for Any Minor Exemption

The Quebec Court of Appeal quashed, on environmental grounds, a municipal resolution on a minor exemption

Read More
Feb 22, 2024