Insights & Articles
Proposed Franchise Legislation in British Columbia
Despite several consultations on franchise specific legislation in recent years by the Liberal Majority British Columbia government, it was the Opposition Party that tabled a draft bill, “Bill M219 – Franchise Act, 2015” (the “Bill”) on May 13th, 2015. The Private Members’ Bill, introduced by the NDP, is largely based on The Uniform Franchises Act (the “Act”). The Act is a prototype Bill created by the Uniform Law Conference of Canada, an organization that seeks to harmonize the laws of the provinces and territories of Canada. The Bill also reflects a 2014 report done by the British Columbia Law Institute (BCLI) titled, Report on a Franchise Act for British Columbia. The report is the end result of consultations that took place in 2013 between BCLI and interested parties such as the Canadian Franchise Association, experienced franchise law practitioners, and a host of other organizations and individuals.
The Bill contains the hallmark requirements of a duty of fair dealing, a fourteen day disclosure period, the right to associate, among other things. These requirements are typical of provincial franchise legislation in Alberta, Manitoba, Ontario, New Brunswick and Prince Edward Island. The Bill also grants rights of rescission for improper disclosure and a right of action for damages for misrepresentation, benefiting the franchisee.
The enactment of franchise legislation in B.C. seems inevitable, if not in the form proposed in the Bill. Every contributor consulted by the BCLI in its report supported the idea of franchise legislation to varying degrees and there was not a single detractor. The only question is whether the government of the day will propose its own version of the Bill. The Bill has only been given its first reading and there is no guarantee that it will proceed to the second. Nevertheless, it appears that B.C. is poised to become the sixth Canadian province to enact legislation specifically directed at franchise law.