The arrival of the Franchises Act will change the rules under which franchisors and franchisees do business with each other in British Columbia. The new Act is important “consumer protection” legislation designed to protect franchisees from the disparity in power and knowledge they have with their franchisors.
The Franchises Act provides the following three general protections:
- A confirmed duty of fair dealing among the parties to a franchise agreement and the right to claim damages for breach of that duty.
- The right of franchisees to form or join associations with other franchisees and the right to claim damages if the right is violated by their franchisor. This right includes protections of the right of franchisees to bring class action lawsuits.
- The obligation of the franchisor to provide a “disclosure document” package to the franchisee. Failure of the franchisor to properly provide a complete and accurate disclosure document may allow the franchisee to rescind the franchise agreement or claim damages.
Lesperance Mendes is familiar with the new Franchises Act and can assist entrepreneurs and businesses navigate this new legal framework. We have a long history of assisting clients in navigating consumer protection legislation and arbitrating, negotiating and, if necessary, litigating complex commercial disputes.