On April 16, the Department of Justice and Consumer Affairs for the province of New Brunswick released a consultation paper setting out the proposed regulations under the province's Franchises Act (the "Act").
Originally passed in 2007, the Act, which has yet to come into force, clarifies five areas of the franchise relationship, specifically: the duty of fair dealing; franchisee association rights; franchisor duties to provide precontractual disclosure, and related remedies; mediation procedures; and, the overriding of provisions requiring litigation to be conducted outside New Brunswick. While there will be some differences from other provincial franchise laws in regard to the contents of a New Brunswick compliant disclosure document, the Act is most noteworthy because the mandatory mediation provisions are a marked departure from the franchise law statutes in the other provinces of Canada.
As the consultation paper notes, before the Act can come into force, two regulations will be needed. First, a regulation to establish the details of the disclosure document that a franchisor must provide to a franchisee before a franchise agreement is signed, and second, a regulation which sets forth the statutory framework for the mediation process. The consultation paper discusses both of these regulations, and provides some notes about transitional issues that will arise when the Act comes into force.
A draft of the consultation paper is available here: http://www.gnb.ca/0062/promos/comments-e.asp. Individuals and groups are invited to submit comments on the proposals detailed in the consultation paper. All comments must be received no later than June 12, 2009, and may be submitted electronically to franchises@gnb.ca, or in writing to Franchises Consultation, Legislative Services Branch, P.O. Box 6000, Fredericton, NB, E3B 5H1.
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