On September 10, 2014, the Government of British Columbia
announced that it is seeking public consultation in respect of its
proposed franchising legislation.
The proposed legislation is based on the Uniform Franchises Act
developed by the Uniform Franchise Law Conference of Canada, and
the recommendations of the British Columbia Law Institute
("BCLI") in its "Report on a Franchise Act for
British Columbia", which includes draft legislation.
Key recommendations from the Report include the following:
Wrap-around disclosure documents are permissible if
supplemented with additional information required to comply with
British Columbia's legislation and regulations;
A disclosure document is valid if it is in substantial
compliance with the disclosure requirements of the legislation and
regulations. 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;
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 its financial statements to
prospective franchisees if its 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.
All stakeholders and members of the public are being encouraged
to provide comments.
Once the legislation is adopted, British Columbia will be the
6th province in Canada to regulate franchising, following the
Provinces of Ontario, Alberta, Prince Edward Island, New Brunswick
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