British Columbia has no special franchise legislation – franchise relationships are governed by the terms of franchise agreements and the common law of contracts. However, a new report reveals that interested parties are largely in favour of changing this regime through the introduction of franchise legislation. This consensus became clear after a year of consultations and studies by the British Columbia Law Institute (BCLI), which has now recommended the introduction of franchise legislation to the B.C. Legislature.
The consultation process began in March 2013, when the BCLI published a Consultation Paper on a Franchise Act for British Columbia (the “Consultation Paper”). For a summary of the Consultation Paper, including the BCLI’s tentative recommendations, click here.
One year later, the BCLI published a Report on a Franchise Act for British Columbia (the “Final Report”). Much of the Final Report contains similar conclusions to those set out in the Consultation Paper, and the BCLI’s principal recommendation is the same as well: B.C. should enact franchise legislation that is based generally on the Uniform Franchises Act (a prototype statute developed by the Uniform Law Conference of Canada) and is harmonized with similar legislation already in force in five other Canadian jurisdictions. The Final Report outlines that, if adopted, harmonized legislation would further the objectives of the federal-provincial Agreement on Internal Trade, minimize the regulatory burden on a significant portion of franchisors in Canada, and also fulfill public policy in support of small businesses and entrepreneurial enterprises. The additional recommendations contained in the Final Report are also very similar to those in the Consultation Paper, as outlined in the link above.
The Final Report states that all responses obtained by the BCLI in the consultation process were given full and careful consideration, including those received from the Canadian Franchise Association, a Special Committee of the B.C. Branch of the Canadian Bar Association, franchisees, and lawyers with expertise in franchise law. The BCLI was encouraged in its views by the fact that none of the respondents expressed opposition in principle to the enactment of franchise legislation in B.C. In fact, according to the BCLI, all respondents saw benefits in the introduction of legislation that delineates the rights, duties and remedies of parties to a franchise agreement with more certainty and in a more accessible manner than the common law.