If it feels like you've been hearing about the federal
government's drafting, re-drafting and re-re-drafting of
Canada's anti-spam legislation (CASL) for years, it's
because you have. And though the law was finalized months ago
in advance of a July 1, 2014 implementation date, the hits have
just kept on coming to further clarify or confuse Canadian
businesses' understanding of what's involved. Whether
it has been by way of the government's ongoing publication of
bulletins, guidelines and FAQs about CASL, or the legal community
advising more and more clients regarding compliance and better
understanding the scope of CASL, it feels like much has changed
since I last wrote in this space in late-March regarding what
franchised businesses needed to know.
By now, we have all read about what is generally captured under
terms like "commercial electronic message", "express
consent" and "implied consent" (spoiler alert
– a lot), and the heft of the fines the government may charge
for non-compliance (A LOT). But I want to focus this blog
specifically on the impact of CASL on franchise systems doing
business in Canada.
First, it is important to keep in mind that e-mails sent across
franchise systems from franchisor to franchisee or between
franchisees is not considered to be a prohibited type of message
under CASL (phew, said no one since as that makes logical
sense). That's pretty much CASL's only recognition of
the uniqueness of the franchise business model. Commercial
electronic messages are prohibited from being sent unless the
sender has the recipient's express or implied consent to send
them. The bucket of "existing business
relationship" is likely to be the instance of implied consent
that will be relied upon by most businesses as it means that
messages can be sent to people provided that that person has
purchased a product or service from the sender within the last two
If that makes a franchisor's head office nervous, it
should. Because in most cases, the transaction between
customer and merchant takes place at the franchisee level, not
between customer and franchisor. When I drop my business card
in a bowl at a local sandwich shop for a chance at a free lunch, I
just gave my implied consent to the franchisee that they can
contact me – not the franchisor.
The franchisee can attempt to get consent on behalf of the
franchisor, but, unfortunately, if the primary sender of a message
is collecting that consent on behalf of a third party (in this case
the franchisor), that third party requires the express consent of
the recipient. Accordingly, whenever a customer is providing
some form of consent (express or otherwise) to a franchisee,
reference should be made somewhere that the customer is also
agreeing to receive email communications from the
However, the recipient must be provided with the opportunity to
withdraw from all email communications sent on behalf of these
third parties. To that end, the subscription management tool
should offer the option to unsubscribe from either the
communications sent by the franchisor and the franchisee. If
third party subscriptions are unsubscribed from, then any third
party who has relied on the consent obtained on their behalf needs
to be notified by so that they know to cease sending communications
to that individual.
In an effort to combat unsolicited emails, CASL has
inadvertently created way more of those messages in the run-up to
July 1 as businesses scramble to obtain as much express consent
from their distribution list as possible. If your inbox is
anything like mine, you have received a plethora of emails seeking
your opt-in consent and there's more coming. Oddly, most
of the emails I have received in this respect have been from law
firms (go figure), but in light of the third party consent rules,
franchisors should take a close look at CASL with their legal
advisors and determine whether similar express consent emails sent
before July 1 might be the safest way to go.
Some franchise systems may be able to creatively squeeze within
a handful of other exemptions from the consent requirement, but
I'm expecting my inbox to get swamped with these requests from
my friends within the franchise industry over the coming weeks.
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.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
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.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).