As of July 1, 2016, franchisors can take advantage of the convenience of email in delivering their franchise disclosure documents (FDDs) in Ontario. The amendment to the regulations of the Arthur Wishart Act (Franchise Disclosure), 2000 is a welcome acknowledgment of the role of email in today's business transactions. It will allow an FDD to be delivered electronically if the following requirements are met:
- the prospective franchisee can view, store, retrieve and print the FDD;
- the FDD contains no links to external documents or content;
- the FDD contains an index of any separate electronic files, which must have "sufficiently descriptive" file names or a statement of that file's subject matter; and
- the franchisor receives a written acknowledgment of receipt from the prospective franchisee.
Franchisors should review these requirements with their lawyers, document management team and IT team to ensure technical and procedural compliance. Franchisors should also consider policies and practices regarding security of their electronic FDDs, such as password protection, watermarks, serialization of documents, meta-data, and other issues related to electronic documents.
An additional prescribed method of delivery was also added to the regulations. The Act previously only permitted FDDs to be delivered personally or by registered mail. Although, in practice, personal delivery was widely considered to include delivery by courier, the amended regulations now expressly provides for the delivery of FDDs by courier, provided that the franchisor pays the costs of the delivery.
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.