Canadian Franchising
Franchising in Canada is growing by leaps and bounds. To illustrate this point, nearly half of all new retail businesses in Canada are franchises. As a result, many individuals and businesses are looking into penetrating the Canadian business market via franchising.Because there are many different laws in Canada that impact franchising, it is good business practice for a potential franchisor to be familiar with these laws and how they concern the business. An excellent source of legal advice relating to Canadian franchising is a franchise attorney.
Some of the services of a franchise attorney 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 law which has an impact on franchising is the Consumer Packaging and Labeling Act, which specifies the information that must be provided on all pre-packaged products, provides for standardization of container sizes, and sets forth warnings or information symbols to be used on consumer packaging labels. For imported products, the law requires that the name and address of the importer, as well as the country of manufacture, be specified on the label. The franchisor will also be required to present most elements of the packaging and labeling of products in both official languages of Canada – 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.