May 25, 2015
Franchisors offering franchises in British Columbia should already be aware that the province is considering introducing franchise legislation. The B.C. government has undergone an extensive consultation process with the British Columbia Law Institute and industry stakeholders, and the current Liberal government has indicated that it may introduce franchise legislation in the fall. Read our previous updates on B.C. franchise legislation developments from May 2014 and April 2013.
In a surprising move, B.C.’s Official Opposition presented draft legislation on May 13, 2015, in the form of a private member’s bill titled “M219 – Franchise Act, 2015” (the Bill). The Bill is modelled on the Uniform Franchises Act (prepared by the Uniform Law Conference of Canada) and, similar to the franchise legislation in Ontario, Alberta, Manitoba, New Brunswick and Prince Edward Island, would impose certain rights and obligations on franchisors and franchisees operating in B.C. including, among other things, the duty of fair dealing, the franchisee’s right to associate with other franchisees without interference by the franchisor, and disclosure obligations of the franchisor prior to entering into a franchise agreement with prospective franchisees. The draft legislation also mirrors the 60-day rescission and two-year rescission remedies for non-compliance with disclosure obligations that are found in the franchise statutes in the other regulated provinces, along with the same right of action for damages for misrepresentation.
As the Bill has only undergone a first reading, and it is not clear when – or if – it will receive a second reading, there is no immediate impact on franchise operations in British Columbia. However, given that the Liberal government has indicated that it may introduce its own franchise legislation in the fall, it will be important to follow developments in B.C. closely in the coming months and to plan for potential updates to franchise operations, disclosure documents and franchise agreements.
An electronic version of the Bill can be found here.
If you have any questions, please contact a member of Osler’s Franchise Group.