Bill-38, the Franchises Act (British Columbia) was introduced in the BC Legislature on October 5, 2015 and passed its third and final reading on October 20, 2015. The Bill will become law once it receives Royal Assent. The Bill is very similar to the franchise legislation in force in the Canadian provinces of Alberta, Manitoba, Ontario, New Brunswick and Prince Edward Island. In addition to requiring pre-sale disclosure of the franchise opportunity to prospective franchisees, the Bill also entrenches the statutory duty of good faith and fair dealing, the right of franchisees to associate without fear of franchisor recrimination, and prohibits attempts to vary choice of law or forum outside of British Columbia in respect of a franchisee's rights under the Bill. Some welcome developments in the legislation include the provision for disclosure by email, the express right of the parties to release a claim in the context of a settlement, dispute or action without offending the statute's anti-waiver provision, and clarification that a franchisee is not required to choose between rescission and a statutory claim of damages for misrepresentation or failure to comply with the Act's disclosure requirements. The small franchisee disclosure exemption for franchises of less than a year is excluded if renewals or extensions exceed a year or if renewal fees are payable. Regulations to the Bill will follow in due course.
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