On March 31, 2014, the British Columbia Law Institute (BCLI)
released its report on a Franchise Act for British
Columbia. Almost a year to the day that BCLI issued its
Consultation Paper on a Franchise Act for British
Columbia, it released its report which recommends the enactment of
franchise legislation for British Columbia. If the
recommendations are adopted, British Columbia would be the 6th
province in Canada to regulate franchising, following the Provinces
of Ontario, Alberta, Prince Edward Island, New Brunswick and
BCLI's principal recommendation is that the franchise
legislation be based generally upon the Uniform Franchises
Act developed by the Uniform Franchise Law Conference of
Canada in order to contribute to the harmonization of franchise
legislation within Canada and further the objectives of the
federal-provincial Agreement on Internal Trade, being the
reconciliation of regulatory standards and standards-related
measures within Canada.
Key recommendations for the legislation include the
Wrap-around disclosure documents are permissible if
supplemented with additional information required to comply with
the British Columbia legislation and regulations;
A disclosure document is valid if it is in substantial
compliance with the disclosure requirements of the legislation
and regulation. Minor defects not affecting a franchisee's
investment decision will not render a disclosure document
Franchisors can accept a fully refundable deposit from a
prospective franchisee prior to the franchisor providing disclosure
so long as the deposit does not exceed an amount prescribed by
regulation, is refundable without deductions and does not obligate
the franchisee to enter into any franchise agreement;
There is no need for mandatory mediation of franchise
Disclosure documents can be delivered electronically or in a
The prohibition against a waiver or release of rights under the
legislation does not apply to a post-dispute settlement
A franchisee is not precluded from claiming damages in addition
to a statutory right of rescission so long as there is no
double recovery; and
Similar to Ontario, Alberta and Manitoba, a franchisor will be
exempt from having to disclose their financial statements to
prospective franchisees if their minimum net worth is $5,000,000,
or $1,000,000 if the franchisor is controlled by a corporation
having a net worth of at least $5,000,000.
BCLI's report concluded that the adoption of the
recommendations for franchise legislation in British Columbia would
extend to BC-based franchisees the same or better protections as
those enjoyed by their counterparts in the 5 other Canadian
provinces with franchise legislation while, at the same time,
minimizing the regulatory burden imposed on franchisors who will
now have to comply with legislation in a 6th
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