Authors: Ahmed Malik, Melissa Cattini, Nicole Graham
The Saskatchewan legislature has made quick work of the Franchise Disclosure Act (the “Franchise Disclosure Act”), by reading it for the third time only a day after being adopted, subject to one amendment, by the Intergovernmental Affairs and Justice Committee.
Now, all that awaits is for the Franchise Disclosure Act to receive Royal Assent and then it will come into force by an Order of the Lieutenant Governor in Council.
For additional details on the Franchise Disclosure Act, please see the following blogs:
- Review of the Franchise Disclosure Act by the Committee
- Second reading by the Government of Saskatchewan
- How the Franchise Disclosure Act measures up to franchise disclosure legislation in other provinces
- What are the requirements of the Franchise Disclosure Act and how it impacts Franchisors
What happens next
The timeline of when legislation will come into force following third reading can vary significantly – from the day of third reading (i.e. The Saskatchewan Remembrance Day Act) to years after receiving its third reading (i.e. The Builders’ Lien (Prompt Payment) Amendment Act, 2018).
As noted in our earlier blog, Regulations to the Franchise Disclosure Act have yet to be published. The Regulations, among other things, are expected to set out what must be included in a disclosure document in greater detail, as well as elaborate on any related delivery and notice requirements.
There also remains uncertainty as to how franchises (by any other name) already operating in the province will be expected to transition their current business model and practices with existing franchisees and operations.
On this note, while it is not certain how quickly the Government of Saskatchewan will move to have the Franchise Disclosure Act in force – or if it will enact the Franchise Disclosure Act in advance of publishing any Regulations – it is strategically important that franchisors begin preparing for its implementation.
What Franchisors can do to prepare
Leading up to the Franchise Disclosure Act coming into force, we recommend that franchisors:
- Review their franchise agreements to ensure that they meet the requirements of the Franchise Disclosure Act
- Prepare a disclosure document or refine those documents previously supplied on an “information only” basis to comply with the requirements of the Franchise Disclosure Act
- Ensure that their current policies and practices align with the Franchise Disclosure Act and do not restrict the right of franchisees to associate with one another
- Engage legal counsel to ensure compliance with the legislation and a smooth transition as soon as it comes into force
MLT Aikins has extensive experience advising franchisors on franchise structures, agreements, disclosure documents, enforcement and dispute resolution processes in Western Canada. Contact one of our franchise lawyers to learn more.
Note: This article is of a general nature only and is not exhaustive of all possible legal rights or remedies. In addition, laws may change over time and should be interpreted only in the context of particular circumstances such that these materials are not intended to be relied upon or taken as legal advice or opinion. Readers should consult a legal professional for specific advice in any particular situation.