Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION NEWS: “Franchises Act” introduced in British Columbia Legislative Assembly, (Oct 8, 2015)

By Greg Hammond, J.D.

The British Columbia Minister of Small Business, Red Tape Reduction & Responsible for the Liquor Distribution Branch, Coralee Oakes, introduced Bill 38, the Franchises Act, to the House of the B.C. Legislative Assembly on October 5. The legislation, if passed, will be the first of its kind to provide legal rights and remedies to B.C.-based business owners who operate or are looking to operate a franchise business in the province.

“We are introducing the Franchises Act because we want investors and businesses in B.C. to be set up for success from the get go,” Oakes stated. “This legislation directly supports small business in B.C.—opening the door for investment and employment opportunities by providing certainty for both parties. Successful franchise owners tend to reinvest and open multiple franchised businesses which lead to more jobs and career opportunities in our urban and rural communities. Franchised businesses play a significant role in B.C.’s economy, and we want to ensure that private sector investments are encouraged—and this legislation will help promote good business relationships.”

The Act would require franchisors to provide potential franchisees with relevant disclosure information—including financial statements, proposed agreements, and all “material facts”—needed to make informed decisions concerning the decision to invest in the business prior to entering into a franchise agreement. The bill also sets forth legal remedies in the event the franchisor does not disclose the necessary information or provides misleading information, including rescission of the franchise agreement and damages. The Ministry of Small Business and Red Tape Reduction stressed that the Act ensures a level playing field and offers a similar framework to other franchise laws across Canada.

The Canadian Franchise Association (CFA) also released a statement on October 5, stating, “CFA has been working with the BC government on the development of Bill 38, the Franchises Act, and will continue to do so to ensure government officials are aware of the concerns and priorities of CFA members and franchising in Canada. A public consultation is anticipated and CFA will continue to keep members apprised.” The CFA also noted that it is currently reviewing the legislation and will provide CFA members with an analysis.

News: FranchisingDistribution