Enactment of the legislation

• The Bill is expected to move through second reading, committee stage and third reading during the 2015 Legislative Session.
• If passed, the Franchises Act will come into force when the regulations, including the details of the disclosure requirements, are complete and approved and when the franchise and legal communities have had time to learn the new law.

Key benefits for B.C.’s business community

• B.C. doesn’t currently have any franchise legislation. This legislation aims to make investing in B.C. even easier and to protect British Columbians who are buying into a franchised business.
• The Act will govern franchised businesses in B.C. and provide important legal protections for B.C.-based franchise operators.
• The Act will harmonize B.C.’s process with other jurisdictions, and aims to reduce costs associated with disclosure documents.
• This franchise legislation is consistent with the approach taken in other provinces across Canada, including Alberta, Manitoba, Ontario, New Brunswick and Prince Edward Island.
• Offering uniform legislation will provide a higher degree of certainty to both franchisors and franchisees and will standardize practices already followed by most large reputable franchisors.

Benefits for franchisees

• The Act ensures franchisees will receive all the information they need to decide whether to invest in a business before signing franchise agreements.
• They will also have remedies if information is not disclosed or if they are misled about potential profits or other information about the franchise.
  • Regulating the sale of franchises
  • Requiring that contracts include pre-sale disclosure requirements
  • Providing legal rights and protections to help parties to resolve disputes

Benefits for franchisors

• The legislation provides franchisors with uniformity in their disclosure requirements and other areas – which means they will know exactly what they need to share with their potential franchisees because it follows the uniform model of legislation.
• By creating legislation that is similar, we can help minimize the work it takes to understand the way we do business here in B.C. which in turn will make it easier to do business across the country and vice versa.

Disclosure documents – what to expect:

• Standardizing the franchise legislation across Canada can help minimize the regulatory burden that can happen when a business moves into the province – so franchisors will already be accustomed to complying with similar rules elsewhere in the country.
• Details of what is required in the disclosure documents will be set out in the regulation. The disclosure documents will include information about the franchisor, such as:
  • Business background
  • Litigation history
  • Bankruptcy or insolvency information
  • Financial statements
• It will also include information about the franchise offer, such as:
  • Costs (e.g., deposits or fees)
  • Copies of proposed franchise agreements
  • A description of any exclusive territory
  • Restrictions (e.g., obligations to purchase from certain suppliers)
  • The franchisor's policy on volume rebates
  • Conditions of termination, contract renewal and transfer of franchise
  • A description of the franchisor´s mediation process, if one is used
  • Training and other assistance programs
  • Advertising funds (whether the franchisee is required to contribute to an advertising fund)
  • A list of their current and former franchisees.