Canadian Franchise Law
There has been a growing interest in franchising in Canada as of late. This is because the industry is booming. As a matter of fact, nearly half of all new retail businesses in the country are franchises. Before putting up a franchise business in Canada, a potential franchisor must first be aware of the different Canadian laws that concern the franchising business. A good way to do this is to hire a attorney in franchise.
Some of the services of a attorney in franchise are: preparing and reviewing disclosure documents; drafting, reviewing, and negotiating franchise agreements; giving advice on the application of franchise laws and regulations; registering and licensing trademarks; and mediating or litigating commercial disputes. Because Canadian franchise lawyers are experts in the field of franchising, they are well-equipped to protect their clients’ business interests. Their services are invaluable not only during the start-up phase, but are essential also in the maintenance stage of the franchise business.
One important consideration when setting up a franchise business in Canada is how federal laws directly affect the franchise industry.The Competition Act is an example of legislation that directly affects franchising in Canada. This law prohibits a person engaged in business from influencing the price at which another person offers to supply a product or service within the country. Consequently, the franchisor cannot dictate the price at which the franchisee offers its products or services. Another example would be the Consumer Packaging and Labeling Act, which specifies guidelines for the packaging and labeling of products to be sold in the country. In case the franchisor is in the business of distributing imported goods, this law would require him or her to specify the country of manufacture, as well as the name and address of the importer, on the product label. Most elements of the labeling should also be written in both the country’s official languages: English and French.
These are just a few of the legal-related matters a potential franchisor or franchisee has to consider before starting to conduct business in Canada. Franchise attorneys will be able to answer business-specific queries or concerns.
-C.D.
