On Oct. 5, 2015, the Government of British Columbia introduced a
Franchises Act for the Province of British
Columbia. It is expected
that the legislation will be approved by the Government of British
Columbia in the fall of 2015 with theFranchises Actin force towards the end of 2016 or
early in 2017.
The legislation is based upon the model franchise act
recommended by the Uniform Law Conference (ULC) and the 2013 report
of the British Columbia Law Institute (BCLI) which recommended
franchise legislation for British Columbia.
The B.C. Ministry of Justice formed an Advisory Group in May
2015 to review the BCLI recommendations and to review the ULC model
franchise act. Peter Snell, co-leader of Gowlings’
franchise and distribution law practice group, was a member of the
Advisory Group and was instrumental in advocating for changes to
the legislation that would assist in solving some of the practical
challenges under the franchise legislation in other Canadian
provinces. These provisions include:
wrap-around disclosure documents are permissible if
supplemented with additional information required to comply with
the British Columbia legislation and regulations
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
the prohibition against a waiver or release of rights under the
legislation does not apply to a post-dispute settlement
classic distribution arrangements will be exempt from
franchise disclosure documents must meet a "substantial
transactions involving franchisees making significant
investment (anticipated to be $3 million) will be exempt from
The regulations to the Franchises Act will be drafted
based upon the ULC model franchise regulations and the BCLI report.
The Ministry of Justice Advisory Group will be reviewing the draft
regulations prior to their public release.
With the enactment of the Franchises Act, British
Columbia will become the 6th province in Canada to regulate
franchising, following the Provinces of Ontario, Alberta, Prince
Edward Island, New Brunswick and Manitoba.
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