2012 marks the further expansion of franchise disclosure legislation in Canada as the province of Manitoba has now proclaimed that its Franchises Act will come into force on October 1, 2012. For franchisors, this occasion marks another important consideration and responsibility when dealing with franchise disclosure in Canada.
If you plan to offer franchises in the province of Manitoba or currently have franchises there which require renewal on or after October 1, 2012, you need to consider changing your franchise disclosure document (FDD) in order for it to comply with the new Manitoba requirements. Manitoba is the fifth Canadian province to bring in a franchise law, and this law includes the requirement that franchisors provide to prospective franchisees a FDD at least 14 days prior to the prospective franchisee signing any agreement or paying any consideration in respect of the franchise. This new legislation also means that half of all Canadian provinces now have a statutory franchise disclosure regime.
Most franchisors now have a single form of Canadian FDD intended for use in the other four provinces currently mandating pre-sale disclosure, namely Alberta, Ontario, New Brunswick and Prince Edward Island. With some small amount of effort by counsel and franchisor, a franchisor can most likely then have a form of FDD that is compliant with all five franchise law provinces as of October 1, 2012.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
