The assessment of whether to purchase a franchised business is a
significant one, and prospective franchisees should be making
informed investment decisions before signing any franchise
Franchise law in various Canadian provinces recognizes the
importance of franchisees receiving as much information as possible
before binding themselves to a franchisor who holds considerably
more power in the business relationship. As a result, the provinces
of Ontario, Alberta, Prince Edward Island, New Brunswick and (later
this year) Manitoba, have franchise legislation in place which
protects the need for franchisees to make educated investment
This is the purpose of the franchise disclosure document
– a compendium of information about the franchise system
which franchisors are required to provide to franchisees operating
businesses in those particular provinces. The legal requirement to
deliver a disclosure document is not taken lightly, and a
franchisee's right to receive one prior to signing a franchise
agreement cannot be waived by a franchisee.
Where a disclosure document is delivered incorrectly, fails to
comply with the required level of information mandated by law to be
disclosed or is not provided at all to a franchisee, that
franchisee may have either 60 days or up to 2 years from the date a
franchise agreement was signed to "rescind" or undo its
franchise agreement and have the bulk of its investment returned
and losses compensated.
It is also prescribed by law that a disclosure document must be
delivered to a franchisee at least 14 days before that franchisee
signs any agreement relating to the franchise or makes any payment
to the franchisor.
Over the course of the next several weeks, this blog will
explore the contents of a disclosure document and the delivery and
format requirements to assist first-time franchisors in achieving
this compliance level and drawing franchisees' attention to
what to look for once they've received the disclosure
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.
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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