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Proposed British Columbia Franchise Legislation Receives Its First Reading

On October 6th, long awaited franchise legislation, Bill 38, a Franchises Act (the “Bill”), was introduced by the Liberal Majority British Columbia government and received its first reading in the British Columbia legislature.

The Bill is based in part on the British Columbia Law Institute’s 2014 report, Report on a Franchise Act for British Columbia, which recommended that British Columbia adopt franchise legislation.

The Bill contains many provisions that are common among the five provinces that have already enacted franchise legislation (Alberta, Ontario, Manitoba, New Brunswick, and Prince Edward Island), most notably, a reciprocal duty of fair dealing, a right of franchisees to associate, and pre-sale disclosure obligation, coupled with a mandatory 14-day disclosure period and rescission rights for franchisees who receive improper disclosure or no disclosure at all.

Although the Bill has only received its first reading, industry experts expect it to pass and suggest it may come into force as early as late 2016. The Private Members’ Bill, recently introduced by the NDP (discussed in  this blog post), is not expected to pass.

Daniel So, chair of McKenzie Lake’s Franchise Law Group, is part of an advisory committee providing the government with input on the regulations to the Bill.