The NEW RULES of franchising

The law also gives franchisees the right to associate freely or join independent franchisee associations without fear of being penalized, and demands both parties act in ""good faith to a commercially reasonable standard.""

PROFIT magazine
December 1999 / January 2000

The NEW RULES of franchising
Laura Pratt

Canadian%20Alliance%20of%20Franchise%20Operators%20Les%20Stewart.jpg

Buying a franchise may get a lot easier, thanks to a new franchise law. In July, Ontario became the second province (after Alberta) to pass franchise legislation aimed primarily at protecting unsophisticated franchisees. It's expected other provinces will soon adopt similar legislation. Even the Canadian Franchise Association believes these changes are overdue.

Until now, franchising was largely unregulated in Ontario, says Les Stewart, president of the Canadian Alliance of Franchise Operators, despite repeated calls from both franchisees and franchisors for new standards to govern franchising relationships.

The basic principle behind the new Arthur Wishart Act is that everyone entering into a franchise arrangement should have access to all the information necessary to make informed decisions, including financial positions and a list of franchisees in the system. The law also gives franchisees the right to associate freely or join independent franchisee associations without fear of being penalized, and demands both parties act in "good faith to a commercially reasonable standard."


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