Uncertainty of Franchise Laws Challenges Businesses
April 26, 2016
According to Lexpert Magazine, as much as 20% of all Canadian consumer dollars for goods and services are spent at franchises.
Given the scope of this industry, it is not surprising that a number of Canadian provinces have enacted legislation to govern franchise relationships. Currently, Prince Edwards Island, New Brunswick, Ontario, Manitoba, and Alberta have franchise statutes in force, with British Columbia poised to bring a franchise statute into force in late 2016 or 2017. However, while these statutes attempt to address the imbalance of bargaining power that underpins most commercial franchise relationships, these statues and the case law that interprets them have given rise to a great deal of uncertainty for franchisors in Canada.
McInnes Cooper lawyer, Michael Melvin is quoted in Lexpert Magazine’s article with respect to the problem of uncertainty in interpreting and enforcing franchise contacts. “You always have to take the equities into consideration in a different way than you would if you were dealing with parties of equal bargaining strength…It becomes a key piece of what you’re doing.”
Michael Melvin assists franchisors and franchisees across Canada and is based in McInnes Cooper’s Fredericton, New Brunswick office. He is listed as a leading practitioner in the area of Franchising Law in the Canadian Legal Lexpert Directory and as an expert in Franchise Law in Who’s Who Legal (Canada). He is also a member of the Legal and Legislative Affairs Committee of the Canadian Franchise Association.
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