Bruno Floriani Marissa Carnevale October 25 2022 Franchising and promotion of use of French in Quebec Lapointe Rosenstein Marchand Melançon LLP | Franchising - Canada Bruno Floriani, Marissa Carnevale Franchising IntroductionCommercial contractsCommunication with clients and packaging and labellingTrademarksAdvertisementWorkplaceCommentIntroductionThe Act respecting French, the official and common language of Quebec (Bill 96) became law on 1 June 2022, with a view to promoting use of the French language in the province of Quebec. This Act amends more than 25 acts and regulations, mainly the Charter of the French Language (the amended charter), the Civil Code of Quebec and the Consumer Protection Act. The franchise industry will be significantly affected by these legislative changes due to the onerous business changes that owners will have to implement in order to comply with changes pertaining to the translation of contracts, trademarks and packaging, websites and the workplace.Commercial contracts As of 1 June 2023, a customer or other adhering party entering into an adhesion contract (ie, a contract where there is no ability to negotiate) will first have to review a French version of the contract and all related documents, before being bound by any explicit expression of their desire to contract in English or any other language. Despite each franchise agreement template being particular to each franchise system, the Quebec courts have generally held that franchise agreements are contracts of adhesion,(1) unless the franchisor is able to demonstrate that the franchisee had the ability to negotiate the essential terms of the franchise agreement.(2)Accordingly, franchisors will no longer be able to prepare the franchise agreement solely in English and simply include a "choice of language" provision in order to avoid having to translate it into French, if there is any risk that it would be characterised an adhesion contract. To be compliant, the franchise agreement and all related documents must first be prepared in French and submitted to the potential franchisee. Afterwards, if the franchisee expressly requests to sign in another language, the franchise agreement can be signed in the other language. The amended charter expressly prohibits passing on the costs of translating adhesion contracts or any ancillary documents into French to the franchisee or any other party.(3) It is recommended that the services of local Quebec counsel or professional legal translator be used for these translations given that, in the event of a discrepancy between the French and the other language version of the adhesion contract, the franchisee or other adhering party can use the version that best represents their interests.(4)To the extent that essential terms of the franchise agreement are in fact negotiable and it is accordingly not an adhesion contract, the franchisor can continue to use a "choice of language" provision to avoid having to translate it into French.The same rules would apply to "consumer contracts", which, in the franchise industry context, can be defined as contracts in which a franchisee or franchisor provides products or services to a consumer, regardless of whether it is an adhesion contract. Accordingly, when providing a contract to a consumer, it must first be prepared and submitted to the consumer in French and then, if the consumer expressly requests to sign in another language, it can be translated into the other language for signing purposes.(5) In contrast, where contracts are not adhesion contracts but include standard clauses (ie, general clauses that are not tailored to the specific circumstances of the contractual arrangement), it remains possible to continue using a "choice of language" provision to avoid additional translation costs.Communication with clients and packaging and labellingAs of 1 June 2022, all customers in Quebec will have the right to be informed and served in French.(6) Franchisors and franchisees must be mindful of this requirement when hiring customer-contact personnel.This right of the consumer to be informed in French is consistent with the already existing requirement for the use of French on all inscriptions on products sold in Quebec (eg, on its containers or its wrapping, on a document or object supplied with it and on menus and wine lists, as well as directions of use and warranty certificates).(7) These existing requirements allowed such inscriptions to be translated into English or any other language, provided that no language be given greater prominence than French, such as by using bigger or bolder fonts. As of 1 June 2022, the amended charter requires that English inscriptions not be "available on more favorable terms" (eg, the English version being included on the outside of the product packaging or box, while the French version is only included on the inside). This rule also applies to invoices, receipts, acquittances and other documents of the same nature, which must also be drawn up in French or, if not in French, with a French version available to the recipient on terms that are at least as favourable.(8)It should be noted that the already existing exceptions in regulations, as well as the exception for documents drafted in a language that is subject of a federal-provincial, interprovincial or international agreement, remain in effect.(9) Additionally, a new exception allows trademarks that are registered under the Trademarks Act of Canada solely in another language and for which no French version of the trademark is listed in the Canadian trademarks register to appear on a product, even partially, only in a language other than French.(10) However, in such an event, any generic term or description of the product itself which is included in the trademark must be provided in both French and the other language.(11)TrademarksBill 96 narrows the exception relating to the use of trademarks in a language other than French, since the current exception for a "recognised trademark" will no longer exist. The "recognised trademark" exception permitted the use of non-French marks, regardless of their status (registered, applied for, or simply in use – that is, common law marks) so long as the French version is not registered. Under the amended charter, the exception for the use of trademarks in a language other than French, in the context of labelling or advertising, will be limited solely to trademarks registered as of 1 June 2025.(12) As previously noted, the only non-French trademarks that can be used in a language other than French are trademarks that have been registered in another language, for which no corresponding French version of the trademark appears in the Canadian trademarks register. Franchisors with unregistered trademarks, such as common law trademarks, who wish to rely on this exception must file accordingly an application for registration with the Canadian Intellectual Property Office to secure a registered mark. As such, franchisors are encouraged to be proactive in applying as soon as possible as it can take several months or even a few years for applications to be examined and a certificate of registration granted.AdvertisementThe current rule that public signs, posters and commercial advertisement must be written in French remains in effect. As of 1 June 2025, the rules regarding the appearance of trademarks on signs, posters and commercial advertisement will be tightened. The French version of trademarks on signs, posters and commercial advertisement visible from outside premises will need to be "markedly predominant" compared to any other language used.(13) If it is not visible from outside premises, the trademark may appear only in the other language, provided it is a registered trademark and that no French version appears in the Canadian trademarks register.(14)The same is true for catalogues, brochures, folders, commercial directories, order forms and any other documents of the same nature that must be available to the public in French, regardless of their medium, and on terms at least as favourable as those upon which any such documents are available in any other language.(15)Accordingly, any material of this nature displayed on websites of the franchised business must also be compliant with this requirement – however, this is usually enforced only in respect of businesses carrying on business in Quebec, the determination of which depends on the court's analysis of the factual circumstances. At this time, the interpretation of the application of this new requirement is unknown.Workplace Last but not least are the new rules strengthening the use of the French language in the workplace. Although written communications, including offers of employment and promotions, between the employer and staff already must be in French, the amended requirement effective on 1 June 2022 is more comprehensive and precise. Communications which must be in French now expressly include, among other things, employment contracts, offers of employment, all written communications with some or all of the staff, all documents relating to conditions of employment and all training documents produced for the staff. The amended charter also extends the application of francisation programs to businesses employing 25 people or more, meaning that franchises with at least 25 employees will have to ensure that they comply with obligations to promote the use of French in the workplace, failing which sanctions could apply.CommentIn light of these new changes, many merchants and franchisors have raised legitimate concerns regarding the cost and effort required to meet the requirements of Bill 96. The amended charter has certainly been controversial and is currently undergoing challenges in the Quebec courts. In August 2022, the Superior Court of Quebec provisionally suspended the application of sections 9 and 208.6 of the amended charter requiring the exclusive use of French in the Quebec courts until final judgment on the merits. This presages some uncertainty regarding the enforceability of certain aspects of the amended charter. While the implementation and enforcement of these new requirements remains somewhat unclear, the amended charter will remain a permanent feature of the Quebec marketplace for the foreseeable future and the best strategy for franchised businesses would be to prepare to meet these new requirements so as to avoid the potential consequences of non-compliance. Given that failure to comply with these new rules may result in fines and other sanctions, it is recommended that firms contact a Quebec lawyer for advice tailored to their needs.This article is intended to outline the key aspects of the forthcoming changes for the franchise industry, but the implications of these changes for franchising in Quebec will also depend on the courts' interpretation of the amended charter, as well as the regulations that the Quebec government will adopt in the coming months in order to implement these changes.For further information on this topic please contact Bruno Floriani or Marissa Carnevale at Lapointe Rosenstein Marchand Melançon LLP by telephone (+1 514 925 6300) or email ([email protected] or [email protected]). The Lapointe Rosenstein Marchand Melançon LLP website can be accessed at www.lrmm.com.Roxana Crihan, articling student, assisted with the preparation of this article.Endnotes(1) Distribution Stéréo Plus inc v Télévision J.M. Beaudoin Inc., 2007 QCCS 5105 (CanLII).(2) Distribution Stéréo Plus inc v 140 Gréber Holding Inc., 2012 QCCS 33 (CanLII).(3) Section 55, para 3 of the amended charter.(4) Section 91, para 3 of the amended charter.(5) Section 151 of Bill 96.(6) Section 50.2 of the amended charter.(7) Section 51 of the amended charter.(8) Section 57 of the amended charter.(9) Section 56 of the amended charter(10) Section 51.1 of the amended charter.(11) Ibid.(12) Sections 51.1 and 58.1 of the amended charter, and section 218(6) et seq of Bill 96.(13) Section 58.1 of the amended charter.(14) Section 58.1 of the amended charter.(15) Section 52 of the amended charter.