It is time for franchisors and franchisees to begin considering
the potential impact of Canada's new anti-spam legislation
("CASL") on their business, as it was recently announced
that this legislation will be coming into force on July 1,
CASL is designed to protect Canadian consumers from receiving
unsolicited commercial electronic messages (a "CEM"). A
CEM is any electronic message the purpose of which is to encourage
participation in commercial activity. The definition of commercial
activity is broad and includes such activity as offering for sale
or advertising goods or services. CASL applies to CEM's sent or
received by a computer in Canada. The CASL will be regulated by the
Canadian Radio-television and Telecommunications Commission
There are three broad prohibitions in CASL:
A prohibition against sending a CEM unless the person receiving
the message has consented to receiving it and the message is in a
prescribed form and content. The prescribed form includes a
requirement to identify the sender and its contact information, as
well as include an "unsubscribe" mechanism.
A prohibition against altering the transmission data in an
electronic message so that the message is delivered to a
destination other than, or in addition to, that specified by the
sender, unless consent or a court order is obtained.
A prohibition against installing a computer program on any
other person's computer system which causes an electronic
message to be sent from that computer system, unless consent or a
court order is obtained. This provision, and the other provisions
related to the installation of computer programs, does not come
into force until January 15, 2015.
CASL uses an "opt-in" approach, which means that
businesses must obtain express or implied consent prior to
sending a CEM. Where express consent is being obtained, the
mechanism by which it is requested must comply with the
requirements of CASL. In addition, the CRTC has stated that
confirmation should be provided following receipt of the consent.
Implied consent is, in certain limited circumstances, also
These circumstances include where the recipient has purchased
goods or services from the person who sends the message within the
2-year period immediately before the date the CEM was sent. A
transitional period of three years has been included in CASL, where
a recipient will be deemed to have provided implied consent, if the
sender and recipient have an existing business or non-business
relationship at the time the legislation comes into effect and
where that relationship included the communication between them of
Franchisors and franchisees should start evaluating the
applicability of CASL to their communications with prospective
franchisees and their current marketing strategies to customers.
For example, consideration should be given to whether
customers' contact information is currently stored on a mutual
database or individualized databases and how this information will
either be deleted or updated pursuant to the legislation.
Further, if a franchisor has a centralized marketing scheme but
advertises to customers based on information provided by the
franchisees, the franchisor will be relying on its franchisees to
obtain the appropriate prescribed consents. These consents must be
obtained in accordance with the requirements under the legislation
in order to be used by the franchisor. These requirements include
addressing whether the franchisor, franchisee, or both will be
using the customers contact information, and setting out the
purposes for which the consent is being sought. A franchisor should
be cautious in relying upon its franchisees to obtain appropriate
consents, because the consequences of non-compliance are
A contravention of any one of the prohibitions can result in an
administrative monetary penalty ranging up to $1,000,000 for an
individual, and $10,000,000 for any other person. There is
also a separate right for persons affected by the contravention to
bring a statutory claim for compensatory damages; this provision,
and the others related to the private right of action, will not
come into force until July 1, 2017.
With the coming into force date for CASL only months away, it is
advisable that businesses start considering its impacts now and
start planning strategies for compliance.
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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