Further to our update in April Ontario has approved the amended regulations to the Arthur Wishart Act (Franchise Disclosure), 2000 to permit electronic delivery of franchise disclosure documents (“FDD’s”). Regulation 581/00 comes into effect July 1, 2016.
Effective July 1, 2016, franchisors will now be able to deliver FDD’s electronically or by courier, in addition to the previously approved methods of in person or registered mail delivery. The complete changes may be viewed here.
With these amendments, Ontario franchise legislation has received a mini-modernization-makeover.
The new legislation provides that electronically delivered FDD’s must meet the following conditions:
- be in a form that enables the recipient to view, store, retrieve and print the FDD;
- contain no links to external content;
- have an index for each separate electronic file setting out a file name or a description of the subject matter if the file name isn’t sufficiently descriptive; and
- the franchisor must receive a written acknowledgement of receipt from the franchisee
As noted, the amendments also permit delivery of the FDD by courier at the cost of the franchisor, as well as delivery of a notice of rescission from franchisees by pre-paid courier.
E-delivery promotes business efficiency and reduces the cost of delivering increasingly lengthy disclosure information that responds to current disclosure requirements. Franchisees will also be able to search and review FDD’s more easily. The new legislation is a positive development for franchisees and franchisors alike
Of interest, the Ministry of Government and Consumer Services has appointed a Business Law Advisory Council to make recommendations on how to amend Ontario corporate and commercial laws to make them more “business-friendly”. We will keep our eyes and ears open for any changes of interest.