In recent years, British Columbia has been laying the groundwork for the introduction of franchise legislation in this province. We have posted about these initiatives on various occasions, including here and here. On October 5, 2015, these efforts culminated in the Provincial Government’s introduction (first reading) of Bill 38 – Franchises Act.
Bill 38 is modeled after the similar legislation already in force in Ontario, Alberta, Manitoba, New Brunswick and Prince Edward Island. It will govern franchise agreements for franchises operated either wholly or partly in British Columbia. Its overarching purpose is to balance protections for potentially vulnerable franchisees against the right of franchisors’ to freely contract and create successful franchise chains. At this point in time, the Bill’s primary provisions aim to:
- confirm a duty of fair dealing for parties to a franchise agreement and provide remedies in the event of a breach;
- confirm a franchisee’s right of association and provide for remedies in the event that right is infringed;
- require a franchisor to disclose financial and other material information to a prospective franchisee before entering into a franchise agreement;
- provide conditions for rescinding a franchise agreement;
- provide circumstances where liability for damages may arise; and,
- prevent the waiver of the application of the Bill.
The Bill is still subject to amendment and will be debated most heavily at the second reading stage. We will be sure to keep you up to date on developments with this Bill over the course of the current legislative session, currently scheduled to end on November 19, 2015.