Bill 38, the Franchises Act, was introduced to the House today by the Minister of Small Business and Red Tape Reduction and Responsible for the Liquor Distribution Branch Coralee Oakes.

If passed, the bill will provide important legal rights and remedies to B.C.-based business owners who operate or are looking to operate a franchise business in the province. To help open the door for small business investment in B.C., the legislation will:

• ensure franchisees have all the relevant business information they need before making the decision to invest;
• guarantee legal protections should franchisees not be given the information they need, and later find themselves in a vulnerable position;
• uphold the franchisors’ rights to freely contract to allow for the success of the franchise; and
• provide certainty and consistency for franchisors, which will encourage investment in British Columbia.

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The legislation is similar to franchise legislation already in place in Alberta, Manitoba, Ontario, New Brunswick and Prince Edward Island. The act will help bring certainty to investors looking to expand into British Columbia, as there is currently no such legislation in the province.

By standardizing the framework for both franchisors and franchisees alike, British Columbia hopes to encourage franchising efforts in the province, which will generate investment and employment opportunities, as well as provide direct and indirect economic benefits to the communities in which they operate.

If passed, the act will come into force when the regulations are complete and approved and there has been an opportunity for the legal and franchises communities to learn the new law.

Quotes:

Coralee Oakes, Minister of Small Business and Red Tape Reduction and Responsible for the Liquor Distribution Branch

“We are introducing the Franchises Act because we want investors and businesses in B.C. to be set up for success from the get go. This legislation directly supports small business in B.C. – opening the door for investment and employment opportunities by providing certainty for both parties. Successful franchise owners tend to reinvest and open multiple franchised businesses which lead to more jobs and career opportunities in our urban and rural communities. Franchised businesses play a significant role in B.C.’s economy, and we want to ensure that private sector investments are encouraged – and this legislation will help promote good business relationships.”

Jennifer Chow, Canadian Bar Association of B.C. president ─

“In our Agenda for Justice document, the Canadian Bar Association of B.C. recommended government enact a Franchises Act to provide protection to small business franchisees and last year we were pleased to participate in the resulting public consultation. Today’s introduction of the Franchises Act demonstrates the positive steps that result when there is collaboration among the legal stakeholders in this province.”

John DeHart, franchisor, Nurse Next Door ─

“This legislation is great news for our industry and a great move for British Columbia as it will ensure good business practices are in place for all franchisors. It will make it easier for franchise companies to expand and invest in our province, save us time and money, and help create jobs. This legislation will also bring British Columbia’s requirements in line with other provinces, making us a more competitive place for franchises to invest and strengthen our economy.”

Jackie Jackson, CEFA Educational Systems, Franchisee – Langley - Walnut Grove and South Surrey - Morgan Crossing ─

“We were very lucky to have bought in to a franchise that shared all the information we needed to feel good about our decision to open a franchise, but we’ve heard that not everyone is so lucky. By giving people buying into a franchise all the information they need to make informed decisions before they sign on the dotted line, you really are setting them up for success. We love our school in Langley and are excited about opening our new location in Morgan Crossing in South Surrey. CEFA is a great franchise, and it’s good to know that those who aren’t as lucky as we have been will have more support.”

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Quick Facts:

• The legislation represents a balanced approach to ensure that franchisors and franchisees have the business certainty they need to succeed.
  • The act requires franchisors to provide franchisees with all the relevant disclosure information needed to make informed decisions about whether to invest in the business prior to entering the franchise agreement and provides franchisees with legal remedies if the franchisor does not disclose the necessary information or provides misleading information.
  • For franchisors that already operate across the country, the act reflects a similar framework and should add no new obligations or costs.
  • For B.C.-based franchisors, it ensures a level playing field.

Learn More:

Read the British Columbia Law Institute’s “Report on a Franchise Act for British Columbia” at: www.bcli.org/wordpress/wp-content/uploads/2014/05/report-76_BC-franchise-act_final_3_with_cvr1.pdf