Franchising in Canada

Things to know

If you plan to establish a franchise system in Canada, you’ll need to comply with provincial franchise legislation in six provinces (Alberta, British Columbia, Manitoba, New Brunswick, Ontario, and PEI)
Key points to consider include the following:
- You’ll need to provide prospective franchisees (including renewing or resale franchisees) with a franchise disclosure document (FDD) 14 days before they sign your franchise agreement or pay any money to you
- You can’t use your FDD from another country
- Your FDD must be customized for each franchisee
Not complying with franchise laws exposes you to significant financial risk - non-compliance gives franchisees civil remedies and rights of action
Depending on how you structure the relationship, you may need to register your business in Canada or pay Canadian taxes

Revise your franchise agreement so that it works in Canada
Draft a national franchise disclosure document (FDD) for Canada, and structure it so that it is easy to customize
Consider using a master franchise or area developer model instead of direct franchising
Apply to register your trademarks and secure your “.ca” domain names
Avoid providing any information (particularly financial information) to prospective franchisees that you don’t intend to include in the disclosure document
Consider whether to incorporate a new entity to be the franchisor in Canada

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