On November 17, 2015, Bill 38, the British Columbia
Franchises Act (B.C. Act), received royal assent. The B.C.
Act provides a substantially similar regime to franchise
legislation in other Canadian jurisdictions; as such, although this
is a significant change in the regulation of franchises in B.C., we
anticipate only a minor impact on franchises operating in multiple
provinces, including British Columbia.
The B.C. Act was introduced in the legislature on October 5,
2015, and will come into force on a later date by regulation of the
lieutenant governor in council. Considering that consultations for
the enactment of the B.C. Act began in March 2013, the progression
of the B.C. Act through the legislative process has been
With the enactment of the B.C. Act, Canada's third-largest
province will join Ontario, Alberta, Manitoba, New Brunswick and
Prince Edward Island as jurisdictions having provincial legislation
governing franchises. The B.C. Act contains provisions
substantially similar to those provided in the franchise
legislation of the other provinces, such as:
A disclosure obligation of the franchisor to provide
prospective franchisees with financial and other relevant
information about the franchise in one disclosure document at least
14 days before the earlier of the signing of any franchise
agreement and the payment of any consideration relating to the
A duty of fair dealing imposed on both the franchisor and the
franchisee in the performance and enforcement of the franchise
agreement, including in the exercise of a right under the franchise
A franchisee's right of rescission upon a franchisor's
failure to provide a satisfactory disclosure document
A franchisee's right of action against the franchisor and
related personnel if the franchisee suffers a loss because of a
franchisor's misrepresentation in a disclosure document or
failure to provide a satisfactory disclosure document and
Authority to void any provision in a franchise agreement
purporting to restrict the application of B.C. laws
The B.C. Act is intended to benefit franchisors by continuing to
establish uniform regulatory regimes across Canada and standardize
franchise practices already followed by more sophisticated
franchisors. Likewise, the B.C. Act will provide appropriate and
needed legal protection to B.C. franchisees who are typically small
Despite the significance of the enactment of the B.C. Act to the
governance of franchise operations in B.C., we anticipate most
Canadian and U.S. franchisors will experience minimal change in
their franchise operations as most are already franchising in other
provinces regulated by similar franchise legislation. Most
franchisors will simply need to make minor adjustments to their
disclosure documents, which are already compliant with other
franchise legislation, to comply with substantially similar
provisions in the B.C. Act.
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