Franchising and Franchise Laws in Canada
Franchising is on the rise in Canada. Franchises make up nearly half of all new retail businesses in the country. Consequently, a lot of individuals and businesses are considering going into the franchise business.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 lawyer in franchise.
A Lawyer in franchise possess the expertise to offer their clients invaluable legal advice relating to the franchising industry in Canada, thus protecting their clients’ business interests. The services they provide are essential not only during the start-up stages of the business, but during the maintenance phases as well. These services include: preparing and reviewing disclosure documents; drafting, reviewing, and negotiating franchise agreements; registering and licensing trademarks; giving advice on application of franchise laws and regulations; and mediating or litigating commercial disputes, among others.
One important thing to note before putting up a franchise business in Canada is that some Canadian federal laws have a direct effect on the franchising business. Take, for example, the Competition Act, which prohibits a person who is engaged in the business of producing or supplying a product or service from influencing upward, or discouraging the reduction, of the price at which any other person offers to supply or advertise a product or service within Canada. What this means is, a franchisor is prohibited from establishing the lowest price at which its franchisee is to offer its products or services. The Consumer Packaging and Labeling Act prescribes policies on how products that are sold or distributed in Canada are packaged and labeled. This law would require franchisors to indicate the country of manufacture and the importer’s name and address for products that are imported. Product labels should also be written in both English and French, Canada’s official languages.
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.
