Guide to Laws and Regulations for Franchised Business

Guide to Laws and Regulations for Franchised Business

The Franchises Act and Franchises Regulation

Introduction

Effective October 1, 2012, the Franchises Act and the Franchises Regulation will come into force requiring franchisors to provide prospective franchisees with a disclosure document enabling franchisees to make informed decisions about entering into a franchise agreement. Rescission of a franchise agreement can be the serious outcome of failure to provide a disclosure document. The legislation also increases franchisee protection from unfair terminations, penalties for associating with other franchisees or other unfair treatment.

While the disclosure document requirement will apply to all new franchise agreements after the legislation comes into force, in some circumstances, franchisor disclosure document delivery will be required on existing franchise agreement renewal.

Act provisions relating to franchisee right to associate, fair dealing and court venue location will apply to all new and all existing franchisor-franchisee business relationships.

Definition

"franchise" means a right to engage in a business in which the franchisee is required by contract or otherwise to make a payment or continuing payments (whether direct or indirect) or a commitment to make that payment or those payments to the franchisor or the franchisor's associate in the course of operating the business or as a condition of acquiring the franchise or commencing operations, and

and includes a master franchise and a subfranchise. (« franchise »)

Highlights of the Act and Regulation

For a copy of the Act, go to http://web2.gov.mb.ca/laws/statutes/2010/c01310e.php. For a copy of the Regulation, go to http://web2.gov.mb.ca/laws/regs/pdf/f156-029.12.pdf. Following are highlights of the Act and Regulation. The Franchises Act and Regulation:

For more information about the Franchises Act and Franchises Regulation, contact:

Manitoba Growth, Enterprise and Trade
Phone: (204) 945-1995
Fax: (204) 945-2964