Thursday, April 25, 2013

British Columbia Law Institute Seeks Public Comment on Franchise Law Proposal

This posting was written by John W. Arden.

The British Columbia Law Institute (BCLI) is soliciting public comments on its recently-issued consultation paper recommending that the province enact franchise legislation similar to existing franchise laws in Alberta, Manitoba, New Brunswick, Ontario, and Prince Edward Island.

The BCLI intends its “Consultation Paper on a Franchise Act for British Columbia” to be “a catalyst for an informed discussion about franchise regulation in BC.” After consideration of responses received, BCLI will produce a report with final recommendations and draft legislation.

The consultation paper recommends, among other items, that:
 British Columbia should enact franchise legislation.

 Franchise legislation should be modeled generally on the Uniform Franchises Act and the Uniform Disclosure Documents Regulation.

 Franchise legislation should not provide for mandatory mediation on the demand of one party of the franchise agreement.

 Legislation should require presale disclosure of information to prospective franchisees.

 A franchisor may request and receive a fully refundable deposit before delivering a disclosure document.

 A disclosure document must state whether or not an exclusive territory is granted under the franchise.

 A disclosure document must state whether the franchisor reserves the right to directly market goods or services.

 An action for misrepresentation should extend to misleading or inaccurate financial or earnings projections.

 A franchisor should be able to use “wrap around” disclosure documents prepared in compliance with laws of another jurisdiction with additional information required by British Columbia.

 There should be a presumption of reliance by a franchisee on a disclosure document.
 The institute is requesting comment from franchisors, franchises, business and consumer organizations, and the general public.

Comments, which will be accepted through September 30, 2013, may be submitted by email at; by fax at 604-822-0144, and by mail at British Columbia Law Institute, 1822 East Mall, University of British Columbia, Vancouver, BC, Canada V6T 1Z1.

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