New Law Provides Canadian Franchisees with More Information

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2 min read
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Toronto-Minister of Consumer and Commercial Relations Robert Runciman recently announced the filing of a regulation under the Arthur Wishart Act (Franchise Disclosure) 2000. The act and the legislation will allow small-business investors to make better-informed decisions before signing a franchise agreement.

"This legislation reflects the interests of both franchisors and franchisees and is the result of an open consultative process that demonstrates the government's commitment to promoting fairness in franchising," Runciman said. "A strong, competitive franchise sector helps create and preserve jobs in Ontario, and pre-sale disclosure benefits small-business investors. This in turn promotes a fair, safe and informed marketplace and supports a level playing field that kindles further business growth."

The regulation sets out the information franchisors will be required to include in the disclosure document that must be given to prospective franchisees 14 days before signing an agreement or making any payment. The disclosure document would include information on the franchisor and how the franchise will be operated.

Sections of the Arthur Wishart Act relating to the duty of fair dealing and the right for franchisees to associate and form organizations were proclaimed on July 1, 2000. However, the sections of the act dealing with disclosure or information required regulations to be prepared. Those sections were completed in the fall of 2000. Remaining sections of the legislation and regulation will come into effect on January 31, 2001. -Ministry of Consumer and Commercial Relations, Ontario, Canada.

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