Thinking of buying a franchise? Expanding your current franchise into Ontario? Here are a few reasons you should hire a franchise lawyer Vaughan ON.
Are you considering buying a franchise or a current franchisor thinking of expanding into Canada? If so, you may want to consult a local legal professional who specializes in franchise law.
Here are three reasons why you should hire a local franchise lawyer in Vaughan, ON:
They know what to look for
Each province has specific franchise legislation. For example, large and established franchises in Ontario are exempt from providing financial statements. However, this is only if they meet the criteria detailed in Part III of O. Reg. 581/00.
Consequently, it’s important to familiarize yourself with the way these laws vary from province to province.
They can promote fair dealing
Most importantly, a franchise lawyer can also help each party to uphold the duty of fair dealing. This is outlined in Arthur Wishart Act (Franchise Disclosure), 2000 which encourages participants in a franchise agreement to engage in good faith. Similarly, having a strong counsel may be able to prevent future complications.
They can handle disputes
If complications do occur, franchise lawyers are uniquely capable of smoothing things over. Ben Hanuka, head of Law Works PC, launched the first franchise disclosure class action in Ontario. The case — Bekah v. Three for One Pizza (2003) — involved the franchisor structuring a transaction in a way that tried to sidestep disclosure requirements. Ultimately the court sided with the purchaser with help from the franchise lawyer.
In conclusion, hiring an experienced franchise lawyer can provide you with significant legal protection.
The idea of franchising is popular amongst those who dream of being in business, but simply don’t have the resources or experience to start out on their own. When franchising, they can rely on the experience of well established businesses as a way of learning all the how-to’s of running a successful business.
Whether you’re an established franchisee or considering becoming a franchisor in Ontario, it’s important to familiarize yourself with Ontario’s franchise legislation. The Arthur Wishart Act (Franchise Disclosure) was first introduced in 2000 for the purpose of helping potential franchisors, as well as franchisees make more informed decisions when you chose to invest. The legislation protects franchisees by providing the right to associate and share information with other franchisees, so you can share information about your business experiences before entering into or during your franchise agreement.
Furthermore, under new legislation the franchisor is required to provide a disclosure document at least 14 days before you sign an agreement or provide any payment. The disclosure documents should include details of the franchise’s background and the offer such as:
- Business background
- Litigation history
- Financial statements
- Costs (e.g. deposits or fees)
- Copies of proposed franchise agreements
- A description of any exclusive territory
- Any restrictions
- The franchisor’s policy on volume rebates
- Conditions of termination, renewal or transfer of the agreement
- A description of the franchisor´s mediation process, if one is used
- Training and other assistance programs
- Advertising funds
- A list of their current and former franchisees
Before signing any offer or providing payment, you are highly encouraged to seek a franchise lawyer. To determine whether or not the franchise has provided a fair and honest representation of the proposed agreement in the disclosure document and to verify it is compliant with the Act as required.
Get in touch with an experienced franchise lawyer at Law Works in Vaughan, we’ll be happy to answer all your questions and provide the guidance you need to make these important decisions.