Franchises Act

Engagement Summary

The Franchises Act passed Third Reading on October 20, and received Royal Assent a month later on November 17, 2015. The Act aims to help level the playing field for small business owners and to increase certainty for investors looking to expand into British Columbia. It is consistent with franchise legislation that is already in place in Alberta, Manitoba, Ontario, New Brunswick and Prince Edward Island.
 
The Act provides important legal rights and remedies to B.C. based business owners who operate or are looking to operate a franchise business in the province, and will:

• Ensure franchisees have all of the relevant business information they need before making decisions 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 B.C.

 
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.
 
Government sought input on a proposed Franchises Act (Disclosure) Regulation based on the Uniform Law Conference of Canada’s Disclosure Documents Regulation, and the recommendations of the British Columbia Law Institute in its draft Franchise Act (Disclosure) Regulation as set out in its “Report on a Franchise Act for British Columbia” on page 133.
 
Government recognizes that franchise purchasers make a significant capital investment yet are often at a disadvantage when relying on the information provided by the company offering the franchise due to a lack of knowledge and experience, and access to expert advice. Franchise legislation will help to rectify this imbalance and support the expansion of franchises by standardizing regulatory requirements, while at the same time encouraging investment in B.C.
 
The proposed regulation will set out the information that is required in a disclosure document and the methods of delivery.
 

Timeframe: 

November 2, 2015 to January 15, 2016
 

Input Received: 

Several stakeholders responded to the call for comments on the proposed regulation, providing email feedback on the required information for a disclosure document.
 
Groups consulted included an advisory group of franchise lawyers, the BC Law Institute, the Canadian Franchise Association, the BC Chamber of Commerce, Canadian Federation of Independent Businesses, BC Hotel Association, New Car Dealers Association, Retail Council of Canada, Retail Council of BC, Coalition of BC Businesses, Chartered Professional Accountants of BC, B.C. Small Business Roundtable and various franchisees and franchisors across B.C.
 

Input leads to action:

 
Government is currently in the process of developing the proposed regulation.