This Q&A chapter provides an overview of the main practical issues concerning local and international franchising, including: current market activity; franchising regulatory framework; contractual issues…

Continue Reading… Practical Law – Q&A Guide to Franchising in Canada

Franchising has become one of the most popular business expansion options, one that is particularly effective when developing into international markets. Franchises that grow with a well-structured system, a thoroughly thought out plan, and exceptional legal documents have the best chance of success.

After long anticipation from the franchise industry, the government of Ontario has finally amended regulations under the Arthur Wishart Act (Franchise Disclosure), 2000 (“Act”) to expressly allow a franchisor to deliver its franchise disclosure document electronically and by prepaid courier.

Most franchise agreements include a non-competition covenant preventing a franchisee from competing with the franchisor during the term, and in many cases after the term of the agreement.

One of the recent concerns for both franchisors and franchisees in the US has been the uncertainty created by regulatory efforts to have franchisors held liable as a “joint employer” of the employees of their franchisees. Most prominent of these efforts has been the National Labor Relations Board’s (“NLRB”) actions asserting that McDonald’s is a joint employer of its franchisees’ employees.