The government of British Columbia is seeking public input on a
regulation under the pending Franchises Act (Act), a new
piece of franchise legislation that will affect the rights and
obligations of parties to franchise agreements. The Act is not yet
in force – its third reading was recently completed before
the legislative assembly1 and the government is in the
process of drafting the corresponding regulations.
The objective of the Act, in the words of the provincial
government, is to "help level the playing field for small
business owners and provide certainty for
investors."2 The Act applies to franchised
businesses that are "wholly or partly in British
Columbia," and will govern franchise agreements entered into
or renewed/extended after the Act comes into force.
The Act's provisions closely follow franchise legislation in
other provinces, including Ontario's Arthur Wishart
Act and Alberta's Franchises Act. Key provisions
Duty of fair dealing – all
parties to a franchise agreement will have a duty to act in good
faith when performing, and enforcing their rights under, franchise
Right to associate –
franchisees will have a right to associate with other franchisees
and to form organizations of franchisees.
Duty of disclosure –
franchisors will be required to provide franchisees with a
disclosure document before the parties enter into a franchise
agreement or any other agreement related to a franchise, and before
any payment is made.
Right of rescission and right to
damages – after receiving the required disclosure from the
franchisor, the franchisee will have the right to rescind a
franchise agreement within 60 days, without penalty or obligation,
if the disclosure does not comply with the legislation. The
franchisee is also entitled to damages if it suffers a loss as a
result of a misrepresentation contained in the franchisor's
Relief for technical errors
Although the Act will hold franchisors liable for
misrepresentations contained in disclosure documents, the Act
provides relief to franchisors for technical errors in disclosure.
Under the proposed section 9, a defect in form, a technical
irregularity or an error may not be considered violations of the
Act where those defects do not affect the substance of the
disclosure document and are substantially in compliance with the
The regulation on which the government is seeking input will set
out the particulars of what must be disclosed and how a disclosure
document must be delivered, and will be drafted based on the
Uniform Law Conference of Canada's Disclosure Documents
Regulation, the recommendations of the BC Law Institute and public
The government has requested that public input be submitted by
January 15, 2016, through emailing CPLO@gov.bc.ca with the subject
line "Franchise Act consultation" or by regular mail
Civil Policy and Legislation Office
Justice Services Branch
Ministry of Justice
PO Box 9222, Stn Prov Govt
Victoria, BC V8W 9J1
The author wishes to thank Kaitlin Shung, articling student,
for her help in preparing this legal update.
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