Things to know
- If you plan to establish a franchise system in Canada, you’ll need to comply with provincial franchise legislation in six provinces (Alberta, British Columbia, Manitoba, New Brunswick, Ontario, and PEI).
- Key points to consider include the following:
- You’ll need to provide prospective franchisees (including renewing or resale franchisees) with a franchise disclosure document (FDD) 14 days before they sign your franchise agreement or pay any money to you.
- You can’t use your FDD from another country.
- Your FDD must be customized for each franchisee.
- Not complying with franchise laws exposes you to significant financial risk — non-compliance gives franchisees civil remedies and rights of action.
- Depending on how you structure the relationship, you may need to register your business in Canada or pay Canadian taxes.
Things to do
- Revise your franchise agreement so that it works in Canada.
- Draft a national franchise disclosure document (FDD) for Canada, and structure it so that it is easy to customize.
- Consider using a master franchise or area developer model instead of direct franchising.
- Apply to register your trademarks and secure your “.ca” domain names.
- Avoid providing any information (particularly financial information) to prospective franchisees
that you don’t intend to include in the disclosure document.
- Consider whether to incorporate a new entity to be the franchisor in Canada.
Canada Company Registration
Company Formations Canada offers fast and easy company registration in Canada for non-Canadian residents and foreign companies wishing to operate and do business in Canada.
Register a new company in Canada as a non-Canadian resident
Register a foreign company in Canada
Canada Registered agent services for foreign companies and non-Canadian residents.
Canada Nominee director services for foreign companies and non-Canadian residents.
Shared from: Osler, Hoskin & Harcourt llp Publication