Big Changes Coming to Canadian Franchise Legislation
Big Changes Coming to Canadian Franchise Legislation
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
Ontario (Might get the) Right to Repair – An overview of Bill 187 the Right to Repair Consumer Electronic Products, Household Appliances, Wheelchairs, Motor Vehicles and Farming Heavy Equipment Act, 2024
Ontario considers new right to repair legislation for consumer products and motor vehicles.
More Than Meets the Eye: The Legal Implications of British Columbia’s Agreement to Recognize Aboriginal Title Over Haida Gwaii
An analysis of legal implications related to the BC Government's agreement with the Haida Nation to recognize Aboriginal title over Haida Gwaii.
Lessons Learned from the TTC’s Ransomware Attack
Lessons learned from the recent investigation by the Ontario IPC into the effectiveness of the TTC's cybersecurity measures and ransomware attack response
Don’t Get Caught by Canada’s Patent Novelty Grace-Period
The key difference between Canada and other jurisdictions like the United States when relying on the grace-period for inventor disclosures.
Shifting Gears – Canada to Consider New Motor Vehicle Equipment Regulations to Help Prevent Auto Theft
Transport Canada announces plan to update safety standards to combat auto theft.
Get updates delivered right to your inbox. You can unsubscribe at any time.