For several decades, professional services have been a fertile field for the development of franchise networks.

However, for any professional services franchisor, Québec presents a legislative and regulatory environment that is unique in North America.

In this bulletin, we will look at some of the main issues and challenges facing any franchisor wishing to establish or develop in Québec a professional services franchise network.

Québec has 46 professional orders that together govern a total of 55 professions. These professions are divided into two categories: exclusive rights to practise professions and reserved title professions.

This professional system is governed by a main statute, the Professional Code, to which are added (i) a specific statute for each of the exclusive rights to practise professions, and (ii) a series of regulations for each of the professions (both exclusive rights to practise and reserved title), which generally include a code of ethics, a regulation on record keeping, a regulation on office keeping and a regulation on the practice of the profession in partnership (including within a professional corporation).

One of the most important features of this professional system is that, for most exclusive rights to practise professions, only a professional who is a member of the professional order governing that profession has the right to perform certain professional acts and gestures related to that profession and, often, also has the exclusive right to operate or own (directly or through a professional corporation) a business that provides the services reserved exclusively to the members of such professional order.

Thus, for many exclusive rights to practise professions, a business that is not owned by the members of that profession does not have the right to offer or render the professional services related to that profession, even with employees who hold that professional designation.

Here is an example that illustrates the particularity of the Québec professional system. In the United States of America, most large pharmacy chains have developed a branch model, with the company, or a subsidiary of the company, owning each pharmacy in its network. Under this model, pharmacy services are provided by pharmacists, but these are often only employees of the company that owns the pharmacies. In Québec, this model cannot be used because the law governing this profession provides that only a pharmacist, or a company wholly owned by one or more pharmacists, can own a pharmacy.

However, this does not prevent the development in Québec of major franchise networks in the field of pharmacy (as well as in several other professional sectors, including, among others, dental and eye care), but their business model must be modified to comply with the Québec professional system.

The following are some of the important issues and challenges raised by the Québec professional system for any franchisor wishing to establish, or develop, a professional services franchise network in Québec.

Exclusivity of practice and ownership

For exclusive rights to practise professions, only members of the professional order governing that profession may perform the services and acts reserved for them.

Also, for many exclusive rights to practise professions, only members of that professional order may own any business that performs those services.

This exclusive right of ownership must be genuine, not merely apparent.

Certain strict rules also govern the case where the professional exercises his profession within a corporation, particularly with respect to the ownership of its shares, its administration and its management.

Professional independence

When practising his profession, the professional enjoys professional independence, which means, among other things, that he must act solely in the interest of his clients and ignore any intervention by another person in the practice of his profession.

Thus, a franchisor cannot, by its agreement, govern the exercise by a professional of acts reserved to his profession. The exercise of drawing the line between what is subject to this professional independence and what constitutes acts of business management that are not is both complex and delicate.

Prohibition of sharing fees and profits

Another important aspect of the Québec professional regime is the prohibition against sharing professional fees and profits with a person who is not a member of the profession, which is found in most codes of ethics.

According to the jurisprudential interpretation of this prohibition, however, this would not prevent a professional from agreeing to pay various amounts to a franchisor (including a royalty calculated on the basis of a percentage of the professional's gross revenues), provided that any amount payable by a professional to a third person (such as a franchisor) represents the fair market value of the consideration (in terms of rights, services and goods) received by the professional from the franchisor.

Professional secrecy and access

Also, many Québec professionals are bound by an obligation of professional secrecy in favour of their clients.

This obligation to maintain professional secrecy, in addition to the laws and regulations governing the protection of personal information, severely limits the franchisor's access to much of the important information of its franchisees, as well as the possibility of sharing this information and using it for various purposes, including those related to the promotion of the franchise network.

For some professions, it also limits the franchisor's right to inspect the operations of its franchisees' businesses, particularly where an inspection could provide the franchisor with access to privileged information.


Advertising by most Québec professionals is also governed by various rules and restrictions that are most often found in their codes of ethics.

Many of these rules prohibit, or severely limit, all comparative advertising.

For a franchise network, an important rule is that advertising for professional services must be distinct from any advertising for other services or goods. In particular, any situation where an advertisement might imply that services or acts reserved for a profession are rendered, or can be rendered, by a person who is not a member of that profession must be avoided.

It is also important to note that the main rules governing the Québec professional system have been deemed by the courts to be of public order of protection, which has the effect, among other things, that these rules take precedence over any contract and that any clause in a contract that contravenes these rules may be annulled.

This is only an overview of some of the main issues and challenges that any professional services franchisor in Québec must deal with.

The Québec professional system is complex and is based on a multitude of laws and regulations that differ from one profession to another.

As a result of these rules, the franchise agreement used by a franchisor in another jurisdiction will have to undergo several important modifications before it can be used in Québec, failing which both the franchisor and its franchisees expose themselves to significant risks that can go as far as the temporary or permanent striking off of the roll of the franchisees from their professional order (which results in the loss of their right to practise their profession).

For the franchisor, the penalty for contravening these laws and regulations is a fine of not less than $2,500 and not more than $62,500 in the case of an individual, or not less than $5,000 and not more than $125,000 in the case of a corporation. In the case of a subsequent offence, these minimum and maximum fines are doubled.

It is also important to know that the Québec Professional Code also provides that, when the offender is a legal person (i.e., a company), every director, officer, representative, attorney or employee of the legal person who authorized, encouraged, ordered or advised the commission of the offence is also personally liable to these fines.

Thus, the best advice that can be given to any professional services franchisor wishing to establish or develop its network in Québec is to surround itself with legal advisors who have real expertise in both professional law and franchising.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.