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Page 1: CFA Guidebook Series GUIDE TO DOING BUSINESS IN CANADA · Guide to Doing Business in Canada 5 Welcome to Canada What is the Canadian Franchise Association? Back in 1967, as Canada’s

CFA Guidebook Series

GUIDE TO DOING BUSINESS IN CANADA

$5.0

0

Page 2: CFA Guidebook Series GUIDE TO DOING BUSINESS IN CANADA · Guide to Doing Business in Canada 5 Welcome to Canada What is the Canadian Franchise Association? Back in 1967, as Canada’s

2 FranchiseCanada.Online | www.cfa.ca ©Canadian Franchise Association, 2019

CFA Board of Directors

BOARD CHAIR John DeHart*, Nurse Next Door Home Care Services & LIVE WELL Exercise Clinic

PRESIDENT & CEO Sherry McNeil*, Canadian Franchise Association

1ST VICE CHAIR Gerry Docherty*, Good Earth Cafes

2ND VICE CHAIR David Druker*, The UPS Store

TREASURER Rick Chittley-Young*, BDO Canada LLP

SECRETARY & GENERAL COUNSEL Peter Snell*, Gowling WLG LLP

PAST CHAIR John Wissent*

CHAIR, LEGAL & LEGISLATIVE COMMITTEE Larry Weinberg*, Cassels Brock & Blackwell LLP

CHAIR, FRANCHISE SUPPORT SERVICES Tony O’Brien*, TruShield Insurance

DIRECTORSHadi Chahin, Mary Brown’s Chicken & TatersSteve Collette, 3rd Degree Training/Actual NutritionFelix DeCata, Boston Pizza International Inc.Lawrence Eade, Box Concepts Food GroupLafleche Francoeur, PaciniSebastian Fuschini, Pizza PizzaClark Harrop, McDonald’s Restaurants of Canada LimitedTerry Hould, ServiceMaster of Canada LimitedAndrew Hrywnak, Print Three Franchising Corporation Rimma S. Jaciw, CFE, WSI DigitalMarc Laurin, MTY GroupDon Leslie, A&W Food Services of CanadaJon-Anthony Lui, Tutor DoctorSherry McNeil, Shoeless Joe’s LimitedGary Prenevost, FRANNETStephen Schober, Metal Supermarkets Family of CompaniesFrank Stanschus, Little Kickers Bob Tipple, Expedia CruiseShipCenters

*Executive Committee member

Published by Canadian Franchise Association

ABOUT THE CANADIAN FRANCHISE ASSOCIATION (CFA)The Canadian Franchise Association (CFA) is the recognized authority on franchising in Canada. With more than 700 corporate members nation-wide, representing many of Canada’s best-known brands, CFA is the indispensable resource for the franchise community and advocates on behalf of franchisors and franchisees in Canada to enhance and protect the franchise business model. CFA promotes excellence in franchising and educates Canadians about franchising, specific franchise opportunities and proper due diligence through its many events, programs, publications, and websites (www.cfa.ca | www.LookforaFranchise.ca).

CANADIAN FRANCHISE ASSOCIATION 5399 Eglinton Avenue West, Suite 116Toronto, Ontario M9C 5K6Ph: 416-695-2896 or 800-665-4232F: 416-695-1950 W: www.cfa.ca / E: [email protected]

© 2019, Canadian Franchise Association (CFA). All rights reserved. Contents of this publication may not be reproduced either wholly or in part, without the consent of the CFA.

Legal Disclaimer: The opinions or viewpoints expressed herein do not necessarily reflect those of the Canadian Franchise Association (CFA). Where materials and content were prepared by persons and/or entities other than the CFA, the said other persons and/or entities are solely responsible for their content. The information provided herein is intended only as general information that may or may not reflect the most current developments. The mention of particular companies or individuals does not represent an endorsement by the CFA. Information on legal matters should not be construed as legal advice. Although professionals may prepare these materials or be quoted in them, this information should not be used as a substitute for professional services. If legal or other professional advice is required, the services of a professional should be sought.

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Guide to Doing Business in Canada 3

TABLE OF CONTENTSWelcome to Canada �������������������������������������������������������������������������������������������������������������������� 4

Guide to Doing Business in Canada: Franchise law ���������������������������������������������������� 10

Expanding to Canada? ���������������������������������������������������������������������������������������������������������������14

The CFA wishes to acknowledge and thank these National Sponsors for their support throughout the year. Find out more about these companies at www.cfa.ca/sponsorship.

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4 FranchiseCanada.Online | www.cfa.ca ©Canadian Franchise Association, 2019

WELCOME TO CANADAAs the largest North American

trading partner of the U.S., Canada is fertile ground for U.S. franchise

systems on the grow

The Canadian Franchise Association (CFA) is a great resource for international fran-

chisors looking to franchise in Canada. There are a lot of reasons for a U.S.-based franchise system to cross the border. For starters, Can-ada is fertile ground for franchising, boast-ing a sector comprising of more than 1,000 franchises and more than 75,000 individual units spanning a myriad of categories rang-ing from quick service and fine dining restau-rants to franchises providing automotive maintenance, B2B products and services, and more. Canada’s thriving franchise sector

accounts for five per cent of the country’s GDP. In the retail sales sector, 45 per cent of all sales are from franchise operations.

As the largest North American trading partner of the U.S., Canada’s close proxim-ity, common language, shared culture, and similar consumer behavior makes it one of the most logical destinations for franchise firms to export their concepts. When it comes to bringing your unique franchise concepts across the border to the Great White North, there’s no better place to start than with the CFA.

Welcome to Canada

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Guide to Doing Business in Canada 5

Welcome to Canada

What is the Canadian Franchise Association? Back in 1967, as Canada’s centennial was being celebrated, a group of franchise busi-ness owners recognized a need for a national umbrella organization committed to the growth, enhancement, promotion, and devel-opment of ethical franchising across the country. The Canadian Franchise Associa-tion (CFA) was founded with this mission and principles and is now the only national trade association serving the franchise industry and the needs of franchisors, franchisees, and anyone considering opportunities in the franchise sector. The CFA is now the recog-nized authority on franchising in Canada, and represents over 700 corporate members across the country, including iconic Cana-dian brands such as Pizza Pizza, M&M Food Market, and McDonald’s Canada.

Our Purpose: To help everyday Canadians realize the dream of building their own businessesThe CFA’s mission is to amplify the under-standing and power of franchising in Canada by advocating on the issues that impact this dream, connecting people with opportuni-ties in franchising, and delivering learning opportunities that make the industry stron-ger. The CFA produces the annual Franchise Canada Directory, and Franchise Canada magazine, considered the country’s most trusted franchise resources.

The CFA has also developed a content website: www.FranchiseCanada.Online. The bimonthly magazine is available at CFA tradeshows and events, on newsstands, and through subscription. The Association also offers Canada’s only tradeshows that exclu-sively feature CFA member franchise sys-tems. Promoted as The Franchise Canada Show, this event features some of the biggest names in franchising, and is held in major cit-ies across the country. The CFA’s wealth of knowledge flows, in part, from its prominent role in the nation’s business community. CFA members represent more than 40,000 busi-ness outlets across the country. As a whole, the franchise industry employs well over a million people. About half of these employ-ees work under the banners of hundreds of CFA member franchise systems.

What Can the CFA Do For You? One of the CFA’s primary roles is to help pro-spective franchisees make the best decision when investing in a franchise by providing resources and education about franchis-ing. The CFA’s websites (www.cfa.ca, www. LookforaFranchise.ca, and www.Franchise-Canada.Online) offer valuable information and resources about franchising, as well as detailed listings in its online member directo-ries. Directories are separated into franchise systems and franchise support services pro-viders (e.g. franchise lawyers, accountants, consultants, etc.).

About the CFAOur Purpose: To help everyday Canadians realize the dream of building their own business.

Our Mission: To amplify the understanding and power of franchising in Canada by:• Advocating on the issues that impact this dream• Connecting people with opportunity and• Delivering learning opportunities that make franchising stronger

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6 FranchiseCanada.Online | www.cfa.ca ©Canadian Franchise Association, 2019

Welcome to Canada

CFA members represent a diverse cross-section of franchise systems in Can-ada, ranging from very large, established operations to smaller regional concepts. When you deal with CFA members, you can be confident you’ll be treated fairly because all members must adhere to a strict Code of Ethics. Franchisors can become members only after they undergo a review process performed by a committee of their peers.

Members join the CFA voluntarily, as fran-chise systems are not obliged to belong to any trade organization. CFA members share the conviction that their commitment to excellence in franchising improves the indus-try as a whole for everyone involved, includ-ing franchisors, franchisees, suppliers, and customers.

Realistically, however, what the Associ-ation can’t do is protect potential investors from making bad business decisions. The CFA does not have specific punitive pow-ers to use against members if they violate the Association’s Code of Ethics. Members, however, may use the confidential, compli-mentary services of a third-party & neutral Ombudsman (available through www.cfa.ca) to help resolve disagreements between fran-chisors and franchisees.

We fulfill our mission through our four brand pillars – leadership, trust, credibility,

and opportunity. Through these pillars, we create a unified force that represents differ-ent elements coming together to create and grow as a multifaceted whole. Working under the motto of “Growing together”, we embrace the concept of growing your business with the support of the greater franchise commu-nity through CFA membership. This sticks true to the concept of franchising – that fran-chisee and franchisor grow their businesses through partnership. Together, we all grow our businesses, our expertise, and our abil-ity to advocate for a thriving future.

Leadership Opportunity

LeadershipWe amplify the understanding and power of franchising in Canada by advocating

on issues that impact the dream of building their business through franchising.

OpportunityWe help everyday Canadians realize the dream of building their own businesses

and connect people with opportunities in franchising.

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Guide to Doing Business in Canada 7

Welcome to Canada

Trust Credibility

TrustWe deliver the learning and networking

opportunities for everyone in the franchise community to make franchising stronger.

CredibilityWe provide our members with credibility

and a full range of programs and services to help them grow through the support of

the franchise community.

You’ve seen their brand names in malls, on signs, offices and storefronts, and have probably purchased or used their products and services. You may be surprised to find that they are part of the wide variety of businesses and brands found in franchising.

There are a surprising number of franchise brands we interact with every day, and we may not even realize that they operate under the franchise business model. Including both well-known systems and emerging brands just making a name for themselves, franchising is bigger than many people know. And there’s a wealth of franchises operating in Canada. This Directory features listings for hundreds of franchise brands, plus the services and suppliers that support the industry.

Franchising is a business model where the company that owns the brand (called the franchisor) licenses its brand, product or services and way of doing business to an investor/business owner (called the

franchisee). In return, the franchisee provides a share of his or her income back to the franchisor.

While when most people think of franchising, their minds immediately jump to “fast food”, the industry as a whole can be found in just about every industry. From the automotive sector to education, and tax preparation, franchising runs the gamut when it comes to providing Canadians with a broad range of products and services.

Franchising: So Many Opportunities

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8 FranchiseCanada.Online | www.cfa.ca ©Canadian Franchise Association, 2019

The Canadian Franchise Association (CFA)

ABOUT US• Founded in 1967, CFA is the only national trade association for franchising in Canada.• CFA is the authoritative, recognized voice for franchising in Canada and the

indispensable resource for the Canadian franchise community.• CFA advocates on behalf of franchisors and franchisees to enhance and protect the

franchise business model.• CFA promotes excellence in franchising and educates Canadians about franchising,

specific franchise opportunities, and proper due diligence through its many events, programs, publications, and websites.

For Members:CFA offers its members exclusive programs and services, including:• Promotion of excellence and growth in franchising.• Industry credibility• Advocacy and government relations• Free, confidential ombudsman program• Awards programs• Educational programs and networking opportunities, including full-day seminars,

webinars, and annual national convention• Member savings program• Mentorship program• Members-Only Resource Area on www.cfa.ca

Quick Look: Canadian Franchise Association

PROGRAMS AND SERVICES

OmbudsmanProgram

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Guide to Doing Business in Canada 9

The Canadian Franchise Association (CFA)

ABOUT OUR MEMBERSCFA members represent a diverse cross-section of Canadian businesses, ranging from large, established franchise systems to smaller, regional systems, as well as professionals and organizations that provide support services and supplies to the franchise sector. In joining CFA, members commit to pursuing excellence and voluntarily adhere to the CFA Code of Ethics.

Franchise System Members: • Companies that are offering franchises in Canada.• Member franchise systems can be found in more than 50 different business

categories and sectors.

Franchise Support Services/Suppliers Members:• Persons or companies engaged in providing products and/or services to franchise

systems and franchisees.• FSS members include, but are not limited to, accounting firms, legal firms,

consultancies, insurance providers and financial institutions.

For Prospective Franchisees:CFA helps prospective franchisees learn about the franchise business model, as well as specific franchise opportunities, through resources such as:• CFA’s official online franchise directory, www.LookforaFranchise.ca• Online resources, like Franchisee Tutorials• Franchise Canada magazine and website (www.FranchiseCanada.Online)• Franchise Canada Directory• The Franchise Canada Show tradeshows• CFA Information Kit

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10 FranchiseCanada.Online | www.cfa.ca ©Canadian Franchise Association, 2019

Guide to Doing Business in Canada: Franchise law

With a vibrant economy and close prox-imity to the United States, Canada is

the natural first destination for franchise companies in the U.S. and overseas that are looking to expand internationally. There are approximately 1,300 franchise brands and over 75,000 franchise units operating throughout Canada, crossing almost 50 dif-ferent sectors of the economy, including retail, hospitality, automotive and health care. Franchises account for one out of every five consumer dollars spent in Canada on goods and services, and they contribute approximately $96 billion annually to the nation’s Gross Domestic Product.

While Canada is an attractive destination for international expansion, franchisors must be aware of the franchise-specific dis-closure laws currently in effect in six of the Canadian provinces.

1. Franchise disclosure legislationThe provinces of British Columbia, Alberta, Manitoba, New Brunswick, Ontario and Prince Edward Island have each enacted franchise disclosure legislation. The rights of franchisees and the obligations imposed

on franchisors under the franchise legisla-tion in these six provinces are very similar, with the general aim being to regulate the marketplace and to protect both prospec-tive franchisees and those already party to a franchise relationship. The legislation is remedial and is intended to address the perceived imbalance of power in the franchi-sor-franchisee relationship by adopting the following key principles:

• The obligation imposed on franchisors to provide disclosure

• The duty of good faith and fair dealing imposed upon franchisors and franchi-sees

• The right of franchisees to associate

Failure to comply with any of these obli-gations gives rise to significant remedies for franchisees. Furthermore, a franchisee can-not contract out of the rights granted to it or grant a waiver of the obligations imposed on franchisors under the legislation.

The franchise legislation also deems unenforceable any provision in a franchise agreement that restricts the application of the laws of the province, or that restricts the

GUIDE TO DOING BUSINESS IN CANADA: FRANCHISE LAW

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Guide to Doing Business in Canada 11

Guide to Doing Business in Canada: Franchise law

jurisdiction or venue to a forum outside of the province with respect to claims enforce-able under that province’s franchise legisla-tion.

2. The disclosure obligationA franchisor wishing to grant a franchise in any of the six disclosure provinces must pro-vide the prospective franchisee with a dis-closure document at least 14 days before the earlier of either: (i) the signing of the fran-chise agreement, or any agreement relating to the franchise, by the prospective franchi-see, or (ii) the payment by the prospective franchisee of any consideration relating to the franchise.

A disclosure document must contain all of the information prescribed by the regu-lations under the legislation, including the franchisor’s financial statements in either audited or review-engagement form, as well as all other “material facts” (as discussed below) that would reasonably be considered relevant to a prospective franchisee’s deci-sion to acquire the franchise. Large, mature franchisors may be exempt from the require-ment to include financial statements if they meet certain criteria.

a. Material factsA “material fact” is broadly defined in the legislation to include any information about the business, operations, capital or control of the franchisor or the franchise system that would reasonably be expected to have a significant effect on the value or price of the proposed franchise, or on the decision to acquire the franchise.

The requirement to disclose information beyond that specifically prescribed by the legislation has led to some of Canada’s most significant franchise-related court decisions. As a result, disclosure documents must, in many circumstances, be customized to include information applicable to the subject matter of the franchise grant or the location of the proposed franchise.

b. CertificationA disclosure document must be certified as complete disclosure in accordance with the legislation. A signed and dated certifi-cate is not a mere formality but a mandatory requirement of the disclosure requirements. Failure to include a properly signed certifi-cate in a disclosure document will result in a determination that no disclosure was pro-vided to the franchisee.

The certificate must be signed and dated in the manner prescribed by the legislation. In particular, an incorporated franchisor must ensure that the certificate is signed by two of its officers or directors (or one, if there is only one) and must be signed per-sonally by the directors and officer, not on behalf of the franchisor.

c. RemediesThe franchise legislation has been broadly interpreted by the courts to ensure that the purpose of the legislation is met and that a prospective franchisee is provided with the information necessary to make an informed decision.

In the event of a franchisor’s failure to comply with its disclosure obligations, there are two separate remedies available to a franchisee: rescission or a claim for failure to comply with the disclosure obligations or misrepresentation.

A franchisee has the right to rescind a franchise agreement if the franchisor fails to properly comply with the disclosure require-ments. Following a valid rescission, the fran-chisor is obliged to essentially put the fran-chisee back into the position it had been in prior to the purchase of the franchise by:

• Refunding all monies paid to the fran-chisor by the franchisee

• Purchasing all inventory, equipment and supplies purchased by the franchi-see pursuant to the franchise agreement at the price paid by the franchisee; and

• Compensating the franchisee for all losses incurred to establish and operate the franchised business

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Guide to Doing Business in Canada: Franchise law

Two separate time periods are available to a franchisee to rescind:

• No later than 60 days after receiving the disclosure document, if the disclosure document did not comply with the delivery requirements of the legisla-tion or if the contents of the disclosure document did not meet the legislation’s requirements

• No later than two years after entering into the franchise agreement, if the fran-chisor never provided the disclosure document

The courts’ interpretation of the rescis-sion remedy has blurred these two time peri-ods by deeming that a materially non-com-pliant or deficient disclosure document is no disclosure at all, entitling a franchisee to rescind within two years after entering into the franchise agreement. As a result, strict compliance with the delivery requirements and the prescribed contents of a disclo-sure document is a necessity. Delivery of a generic “standard form” disclosure docu-ment to a prospective franchisee is insuffi-cient and will not protect a franchisor from claims of non-compliance - particularly in cases where additional material information regarding the proposed franchise is known to the franchisor and is not fully disclosed.

In addition to the rescission remedy, a franchisee has the right to bring a claim for damages for misrepresentations made in the disclosure document or for a franchi-sor’s failure to comply with the disclosure requirements. Accordingly, if a franchisee misses the time period for rescission, it can still seek damages for a franchisor’s failure to comply with the disclosure requirements.

Claims for misrepresentation can be made against not only the franchisor, but also against the directors or officers who signed the certificate of disclosure and other indi-viduals who are involved with the grant of the franchise. “Misrepresentation” is defined broadly to include an omission, and a fran-chisee is deemed to rely on a misrepresen-

tation in a disclosure document and on the information contained in the disclosure doc-ument provided.

3. The duty of fair dealingFranchise legislation in Canada imposes on all parties to a franchise agreement a duty of fair dealing in the performance and enforce-ment of the agreement. This includes the duty to act in good faith and in accordance with reasonable commercial standards.

The courts have interpreted the duty of fair dealing to require that a franchisor enforce the franchise agreement in a man-ner that takes into account the interests of the franchisee (but not to the exclusion of the franchisor’s interests) without malice or ulterior purpose. In effect, the obligation imposes limitations on a franchisor’s discre-tion in enforcing its strict contractual rights where such exercise negatively impacts the interests of the franchisee. A breach of the duty of fair dealing is imposed on both the franchisor and a franchisee, and entitles the non-breaching party to claim damages for the breach.

4. The right of associationFranchisees have the right to associate with other franchisees and to form or join an organization of franchisees without penalty or interference from the franchisor. Any pro-vision in a franchise agreement that restricts this right is void, and a franchisee has a right of action against the franchisor for breach of this right. The right of association has been used by the courts to protect a franchisee’s right to participate in a class action claim against a franchisor.

5. Rights cannot be waivedUnder the franchise legislation, rights given to a franchisee and obligations imposed on a franchisor cannot be waived. Accordingly, a release by the franchisee as a condition to the franchisor’s consent to a renewal or transfer of its franchise must expressly exclude rights and obligations imposed by

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Guide to Doing Business in Canada: Franchise law

the legislation.In addition, the applicable provisions in

the franchise agreement requiring a release by the franchisee on renewal or transfer must expressly state that the release excludes the rights and obligations imposed by applicable franchise legislation in the franchisee’s prov-ince - or the condition requiring delivery of the release will be rendered void. However, the courts will uphold a release given by a franchisee of existing known claims as part of a negotiated settlement of a dispute.

6. Province of QuébecThe province of Québec is a civil law jurisdic-tion. While Québec has no franchise-specific legislation, both the Civil Code of Québec and the Charter of the French Language apply to franchising.

Québec’s Civil Code contains provisions governing “contracts of adhesion,” which include franchise agreements and other standard form agreements of a franchisor. One interesting provision of the Civil Code states that any terms of a contract that are not fully known to a party, such as a franchi-see, at the time of signing will not be enforce-able. This could affect the usual franchise agreement term that requires franchisees to comply with the operations manual, and would require franchisors to arrange for a confidential disclosure of the manual to a prospective franchisee before the franchise agreement is signed.

The Civil Code also contains a statutory duty of good faith. This duty is broader than the duty of fair dealing under the provin-cial franchise legislation, as it applies to the negotiation as well as the performance and enforcement of franchise agreements.

The Charter of the French Language man-dates French as the required language of doing business in Québec and in the work-place in Québec. “Doing business” applies to forms, advertising (including websites), post-ers and signs. In addition, if a French version of a trademark has been registered, it must be used by a franchised business in Québec.

While the Charter requirements typi-cally result in the equal use of French and English, there are some provisions, such as those governing the use of signs and posters, where the use of the French language must be “markedly predominant.” This usually means a French-to-English ratio of two-to-one in size of wording or number of items.

In the workplace, working documents must be available in French, including soft-ware if French-language versions exist.

Franchising is a significant and well-recog-nized means of doing business in the prov-ince of Québec, and although there are spe-cific laws intended to preserve and entrench the French language in the province, they are usually easily complied with.

Peter Snell, Partner, Gowling WLG604�891�2281peter�snell@gowlingwlg�com

Peter Snell is a partner who you can trust to help you expand your franchise business in Canada and around the world� Peter is based out of Gowling WLG’s Vancouver and Calgary offices, but his clients know him as being their solution in “Canada�”

With a unique blend of business law and intellectual property law experience, Peter is well positioned to help your business address key intellectual property issues and incorporate them into your strategic planning� Peter’s continued success in business and intellectual property law have been recognized by the Intellectual Property Committee - part of the American Bar Association’s Business Law Section - who appointed him its chair� His success in franchising has been recognized by the Canadian Franchise Association, who appointed Peter as its general counsel in 2015�

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14 FranchiseCanada.Online | www.cfa.ca ©Canadian Franchise Association, 2019

Expanding to Canada?

When an American franchisor wishes to expand its franchise system to Can-

ada, there are a number of important issues to be considered, including the following:

Brand Protections❏ Search availability of brand name re:

trade-marks and potential incorporation❏ Register Trade-marks and Domain Names

(including .ca domain names). Note: Only a Canadian registered Trade-mark is enforceable in Canada. Consider register-ing French equivalent names for use in the province of Quebec

❏ Establish Confidentiality Agreement for prospective franchisees to protect your Trade Secrets

❏ Consider registration of copyrights and patents

Form of Doing Business❏ Consider alternatives (i.e., direct fran-

chising, master franchising, area develop-ment, licensing, distribution)

❏ Identify your appropriate corporate struc-ture: Branch, Subsidiary, Joint Venture or Partnership. Also, consider using an unlimited liability corporation as a subsid-iary

❏ Consider Canadian tax matters, including Canada-U.S. Tax Treaty, withholding taxes and value-added taxes (GST/PST/HST)

Privacy and Anti-Spam Issues❏ Compliance with Canadian personal pri-

vacy legislation and anti-spam legislation

Commencing Operations❏ Retain experienced professionals: Cana-

dian franchise lawyer, accountant and consultant

❏ Compliance with consumer taxation regis-tration requirements (GST/PST/HST) and customs duties

❏ “Canadianize” U.S. franchise documents using Canadian franchise lawyer. This includes a Franchise Disclosure Docu-ment complying with franchise legislation in some or all of the 6 franchise-regu-lated provinces (BC, Alberta, Manitoba, Ontario, New Brunswick and PEI)

❏ Also “Canadianize” your Operations Manual

❏ Allocate or hire personnel for training and other tasks associated with establishing operations in Canada

❏ Negotiate contracts with Canadian sup-pliers

EXPANDING TO CANADA?A Brief Checklist for American Franchisors

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Expanding to Canada?

❏ Implement packaging and labelling requirements - metric and bilingual (English / French)

❏ Establish POS or another “store level” operating system

Additional Documentation❏ If relevant, establish Master Franchise

Agreement between U.S. parent and Cana-dian subsidiary

❏ Prepare forms of leasing documents (lease and sublease)

❏ Consider drafting Canadian forms of guar-antees and security documents

Doing Business in Quebec❏ Compliance with Civil Code of Quebec

and Quebec Charter of the French Lan-guage, including translation of English language documentation to French and establish a French website for use in Quebec

❏ Consider use of Quebec partner, employee or consultant to advise on cul-tural / business issues

Miscellaneous Issues❏ Cross-border immigration visas (“work

permits”) allowing key personnel to move to Canada

❏ Establish forms of employment contracts (“employment at will” is not valid in Canada)

❏ Revise documentation for Canadian currency and Canadian spellings (for example, “labour”, “cheque” and “colour”)

❏ Revise agreements to comply with Cana-dian governing law and court jurisdiction)

This checklist in general in nature. It does not include all relevant laws or legal issues. Also, it does not constitute legal advice, which would only be given pursuant to a for-mal engagement letter.

© 2018 John Layton Rogers Law Corporation dba “Likewise”. All rights reserved.

COMING TO CANADA? JOIN THE CFA!If you’re ready to grow north of the border, membership with the Canadian Franchise Association is essential for your success! Here are 4 reasons why you need to be a CFA member:

Lead generation. Connect with Canadian franchisees and area devel-opers through our magazines, websites, and tradeshows.

Credibility. Your brand might not be known in Canada, but ours is. Associate your brand with the most trusted name in Canadian franchising for more than 50 years.

Advocacy. We’re committed to pro-tecting the franchise business model, ensuring Canada’s legislative land-scape remains friendly to franchising.

Education and networking through our events, mentoring programs, and more.

If you’re interested in becoming a CFA member, contact Angela Bennett, Sales Coordinator, Membership & Advertising, at [email protected] or 1-800-665-4232 ext. 296. Visit cfa.ca/join for more information.

Page 16: CFA Guidebook Series GUIDE TO DOING BUSINESS IN CANADA · Guide to Doing Business in Canada 5 Welcome to Canada What is the Canadian Franchise Association? Back in 1967, as Canada’s

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Everything you need to create your franchise future!Buying a franchise can be an overwhelming process.

The good news is you don’t have to do it alone. Franchise Canada is here to guide you through the franchise process, with everything you need in one spot:

www.FranchiseCanada.Online

Learn about franchisingEasy-to-read franchising articles and tutorials can make a huge difference as you navigate your franchising journey. Our resources have been designed with you in mind, and have helped many other prospective franchisees understand the franchise business model, and what it means for those starting out.

Prepare for business ownershipAre you a first-time business owner? Understanding your responsibilities as an owner is very important to your success in franchising. Gain competency in the basics of business ownership so you can run your business like a boss.

Discover franchise opportunitiesDon’t settle your future on the first franchise you see. There are over 1,300 different franchise opportunities available across more than 50 different industries, and at every price point. Explore the wide range of opportunities available to you in our online directory.

Connect with franchisorsBefore you sign a franchise agreement, get to know the people behind the brand that you’re set to partner with. You can speak to them in person and face to face at the Franchise Canada Show, or set up a meeting through our online directory.

Find financing and legal supportBefore you sign on the dotted line of the franchise agreement, you’ll need to ensure your finances are in order, and that you fully understand the franchise disclosure document. Learn from franchise professionals, who share their advice to help you through the critical disclosure process.

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