Canada
Franchise regulation
No national franchise-specific legislation. Six of ten provinces have adopted local franchise legislation. Those provinces are New Brunswick, Prince Edward Island, Ontario, British Colombia, Manitoba and Alberta.
Pre-contractual disclosure requirements
The six provinces with franchise legislation all impose disclosure requirements.
There is some variation between provinces, though generally the franchisor must disclose all material facts, including prescribed facts, in a single (subject to limited exceptions in Manitoba) prospectus-type document that is delivered at one time. This must be at least 14 days before payment of any consideration by the franchisee or execution of a franchise agreement or any agreement related to the franchise. The disclosure document must include a prescribed certificate signed by 2 directors or officers of the franchisor.
Material changes occurring between disclosure and signing the franchise agreement must be disclosed in a statement of material change. The SMC must also contain a prescribed certificate, but does not re-start the 14-day waiting period.
Quebec does not have franchise legislation, but its Civil Code does generally require limited pre-contractual disclosure (this is a general obligation between contracting parties that is not specific to franchising).
Most franchisors produce a single national franchise disclosure document that satisfies all provincial requirements, and that is suitable to be provided in the remaining provinces on a voluntary basis.
Canadian disclosure documents differ significantly from US disclosure documents, including that Canadian disclosure documents must be customized for each franchisee who receives the document.
Registration
No
Other issues
There is no governmental or other administrative oversight of franchising in any province or at the federal level.
Franchisors and franchisees must comply with the common law and statutory requirements of good faith and fair dealing.
Other than the duty of good faith and fair dealing, there are no “relationship laws” in provincial franchise statutes, nor any “good cause” requirements for termination.
If franchising in Quebec, agreements must comply with Quebec civil law.
Franchisees in the six regulated provinces have a statutory right to associate with one another, and franchisors cannot interfere with this right
Difficulty Rating/Comments
