Canadian Franchise Law Changes: 2016 in Review
Portions of this contributed by Chad Finkelstein from his Financial Post article (http://business.financialpost.com/entrepreneur/franchise-focus/new-regulations-on-the-books-that-could-affect-your-franchise).
Some significant changes came to franchise laws across Canada this year. While they may not immediately affect you, knowing what happened or may happen in the future will help keep you informed just in case.
Quebec signage laws
Quebec's laws currently require all businesses to have all advertisements and signs in French. However, if a business has a trademark that is registered only in English with the Canadian Intellectual Property Office, they were previously allowed to have that trademark in English alone. New changes this year mean that if someone can see the English words on a business sign or display when passing by, they must also be able to see the French equivalent, as reported by Blakes Business Class (http://www.blakesbusinessclass.com/quebec-publishes-draft-regulations-requiring-the-presence-of-french-on-outdoor-signs/). Business do have a grace period of three years to comply with this new requirement.
Ontario menu laws
Coming into effect on January 1, 2017, are new menu laws for food establishments in Ontario. Food service businesses with 20 or more locations in the province have to post and display the calorie counts for their standard beverage and food items, as reported by Osler (https://www.osler.com). This law applies to hotels, movie theaters, grocery stores, restaurant chains and other venues. Under this new law, the calories must be displayed wherever food is, including on eat-in menus, menu boards and in some ads.
One issue for franchises regarding the new law is that franchisors can be held liable if their franchises are not fully compliant. This means that franchisors will need near-complete or complete control over the ingredients purchased by franchisees so that the posted calorie counts do not deviate from research and testing done by the franchisor.
British Columbia's new franchise laws
In February of 2017, British Columbia will be the sixth province in the country to enact franchise laws, according to the Globe and Mail (http://www.theglobeandmail.com/report-on-business/small-business/sb-managing/new-bc-franchise-rules-offer-more-protection-to-franchisees/article32263132/). These laws are generally consistent with the laws found in the other provinces and include setting requirements for disclosure documents and delivery.
Ontario evaluating employment law changes
Ontario is currently considering changes to its employment laws, one of which involves making franchisors the joint employers of a franchisee's employees, according to JDSupra Business Advisor (http://www.jdsupra.com). This could have a significant impact on franchising in the province, so it is certainly a development to watch closely.
Franchise law changes can have a tremendous impact on the industry, so keeping up to date with them is crucial whether you are already a franchisee or are thinking about becoming one. Stay on top of legal moves affecting franchises so you always know what is coming down the pike.