All About Canadian Franchising
A Franchise Agreement is a complex contract, and franchising is legally very document-intensive. It is important for a prospective franchisee to understand what he or she will be signing. Canadian Franchises are governed by both federal and specific provincial laws. For example, franchisors awarding franchises in Ontario and Alberta are required by law to provide the franchisee disclosure documents at least 14 days before the prospective franchisee pays any money or signs any agreement relating to the franchise. These documents can help assist the franchisee in assessing the nature of the investment, but they are also oftentimes written for the benefit of the franchisor. Hiring a good Canadian Franchise Lawyer is one of the best ways to protect the interests of a potential franchisee.
Another aspect that a potential franchisee should consider before signing a franchise agreement is whether the franchisor owns or controls the trademark.Franchise law is closely related to trade marking, and most Toronto Lawyers who have a business background are knowledgeable in trade marks, copyrights, and patents. Many are registered trademark agents as well.
It will definitely work to the first-time franchisee’s advantage if he does some research to learn as much as he can about the franchising business.Working with franchise attorneys who can help the franchisee understand his legal obligations.This way, the potential for risks is kept to a minimum. Before investing, it is best to be completely familiar with all the business aspects. The franchise lawyer can also assist with the franchisee’s understanding of the Franchise Agreement, as well as review and negotiate it on behalf of the latter.
Another area of consideration for Canadian potential franchisees is US-based franchisors. When dealing with a US-based franchisor, the franchisee should ensure that the franchise agreement has been modified in accordance with Canadian laws, customs, and practices. Some franchise agreements may still contain laws specific to the US and not applicable in Canada. Canadian franchise lawyers can alert their clients on these matters, and discuss them with the franchisors.
Other matters that franchisees need to consider and can consult a franchise lawyer about franchise fees and royalty rates; how advertising funds are going to be spent; control of the lease for the franchise location; rebate percentages from suppliers; extent of the franchisor’s discretion or right of approval; ease of reselling or renewing the franchise business; rights to buying the franchise business itself; and the effects of the Alberta Franchise Act and Franchise Act of Ontario on the franchise.
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