Franchising in Canada

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

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