The Government of British Columbia introduced a new Franchises Act in the legislature on Monday. The legislation is expected to pass the legislature this fall and become law in 2016 as both the government and opposition in principle support the legislation.
British Columbia will join Alberta, Manitoba, New Brunswick, Ontario and Prince Edward Island in adopting uniform franchise law. The act will help bring certainty to investors expanding into British Columbia, as there is currently no such legislation in the province.
The legislation intends that franchisors and franchisees have the business certainty they need to succeed. For franchisors that operate in other jurisdictions with uniform franchise law, the act provides a similar framework and should provide consistency and reduce costs. For franchisors and franchisees alike, it ensures a level playing field.
The legislation will:
- confirm the duty of fair dealing of parties to a franchise agreement and provide for remedies in the event of the breach of that duty;
- confirm a franchisee’s right of association and provide for remedies in the event of the infringement of that right;
- require the disclosure, by a franchisor to a prospective franchisee, of financial information and other relevant information about a franchise or a franchise system before the prospective franchisee enters into a franchise agreement;
- provide conditions for rescinding a franchise agreement;
- provide circumstances in which there may be liability for damages; and,
- prevent the waiver of the application of the law of British Columbia or, in the event of a claim or dispute under a franchise agreement, of the restriction of jurisdiction or venue to a forum outside British Columbia for proceedings in relation to the claim or dispute.
RCC will monitor debate in the legislature and supports passage of the legislation. We would advocate for its passage should it become necessary.
The British Columbia legislation is based upon the work undertaken by the B.C. Law Institute whose report was released in March 2014.
Uniform Franchise legislation is supported by both the Canadian Bar Association and the Canadian Franchise Association.