Ontario is proposing to amend Regulation 581/00 under the Arthur Wishart Act (Franchise Disclosure, 2000) to permit franchisors to electronically deliver disclosure documentation ("FDD") to prospective franchisees as well as deliver FDD by courier. See the proposed amendments here.
The draft legislation provides that electronically delivered FDD's must be in a form that enables the recipient to view, store, retrieve and print it, contains no links to external content and has an index for each separate electronic file that describes the subject matter therein. Electronic delivery of FDD's will only be effective were the franchisor receives an electronic acknowledgement of receipt from the prospective franchisee. The proposed amendments will also permit delivery by courier at the cost of the franchisor, as well as delivery of a notice of rescission by pre-paid courier. Franchisors may currently provide disclosure documents to franchisees personally, by registered mail or by any other prescribed method – there are no other prescribed methods of delivery.
We encourage franchisors subject to the Ontario franchise legislation to submit any comments before May 2, 2016. Instructions on providing feedback are set out at the link above.
Going west, the Alberta government is considering removing the Mature Franchisor exemption from the Franchises Act. Under the Franchises Act Exemption Regulation, a large size franchisor is currently exempt from disclosing financial statements as part of its FDD if the franchisor or the corporation controlling the franchisor meets certain criteria of established size and net worth. This exemption is consistent with other provincial franchise legislation. If Alberta removes the Mature Franchisor exemption, it poses a(nother) risk that will make Alberta less attractive to franchise system investors.
We are closely tracking the process of these proposed amendments in both Alberta and Ontario and will keep you apprised of any developments as they arise.
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