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Thinking of franchising your restaurant? Not knowing the law could cost you.

Thinking of franchising your restaurant? Not knowing the law could cost you. Before discussing what franchise law is all about, and what it means for franchisors and franchisees doing business in Canada, it is important to first understand why we have franchise laws in the first place. Currently, five Canadian provinces (Ontario, Alberta, Prince Edward Island, New Brunswick and Manitoba) have franchise legislation in place, with a sixth (British Columbia) expected to enact franchise law at some point in the near future. Those five provinces provide for a statutory definition of a “franchise”, which, at its most elemental, can be summarized as follows: (i) granting someone a right to conduct a business under a trademark; (ii) charging some initial and/or ongoing fee for that right to conduct that business under that trademark; and (iii) exercising substantial control over that business owner’s operations. If you can decisively eliminate any one of…