Manitoba Introduces Franchise Law

Big news for the franchise industry – Manitoba now has franchise law.  Well, not quite yet, but, effective October 1, 2012, Manitoba will join Ontario, Alberta, PEI and New Brunswick as the only provinces in Canada to have enacted franchise legislation, meaning a statutory enshrinement of franchisee rights is codified in that province.

In particular, this means that franchise disclosure documents (FDDs) will soon be required to be provided to prospective franchisees in Manitoba, as is the case with those other provinces.  Overall, the disclosure requirements for Manitoba are fairly consistent with those provinces, as well, so franchisors should be able to work with their lawyers with ease to smoothly augment their existing FDDs with the changes needed for Manitoba.

Both franchisors and franchisees will be pleased to learn that electronic delivery of an FDD is permitted in Manitoba (as in PEI and New Brunswick), so they will not have to rely on registered mail or personal delivery as are specified elsewhere.  This should facilitate the efficient delivery of FDDs from franchisors located in Manitoba, in other provinces or outside of Canada entirely.

One of the technical requirements for FDDs that is unique to Manitoba is a tweak to the common condition that FDDs must be delivered “as one document at one time”.  This has always meant that franchisors must ensure that every page which makes up the FDD is delivered as one fully assembled package all at the same time, and not in parts or installments. 

Under Manitoba franchise law, no such requirement exists, so franchisors may deliver various pages of the FDD in parts, so long as each document is identified as “part of” the disclosure document, and a certificate verifying the accuracy and completeness of the FDD is included with the last document that is delivered to the franchisee.

Chad Finkelstein is a franchise lawyer at Dale & Lessmann LLP (www.dalelessmann.com) in Toronto and can be reached at cfinkelstein@dalelessmann.com or (416) 369-7883.