Underneath the Golden Boy - Robson Hall Faculty of Law

248 Underneath the Golden Boy
• did not provide promised business support and training;
• misrepresented establishment and operating costs;
• required the use of suppliers that provided substandard equipment and
that paid a rebate to the franchisor;
• did not supply promised equipment or supplied faulty equipment; and
• did not respond to requests for a meeting to discuss the problems.
The Commission is very interested in receiving the views of those with
franchise experience in Manitoba, whether from the point of view of franchisors
or franchisees.
CHAPTER 3: CANADIAN FRANCHISE REGULATION
A. Background
Governments in Canada, the U.S., and several other countries have taken
legislative measures to regulate franchising activity. The early U.S. and
Canadian statutes created registration schemes, modeled after U.S. securities
legislation. These statutes required a franchisor to register documents relating to
the sale and operation of a franchise with a governing body, and the governing
body carried out activities to regulate and oversee franchise activity.
More recent statutes have adopted the disclosure model, which requires
franchisors to disclose specific detailed information to prospective franchisees
before the sale of a franchise, but does not include government registration or
oversight. The legislation may also include provisions that govern to various
degrees the ongoing relationship between the parties, incorporating principles
such as the duty to deal fairly and the right of the franchisee to associate freely
with other franchisees.
B. Canadian Franchise Regulation
1. Alberta Franchises Act
Alberta was the first Canadian jurisdiction to enact franchise legislation, in
1971. The Alberta Act was modeled after the first U.S. franchise statute, in
California, which was in turn modeled on California securities legislation. 72 The
72
F. Zaid, Canadian Franchise Guide, loose-leaf (1993) at 2-101 and 113-114; Alberta Ministry
of Consumer and Corporate Affairs, Discussion Paper on the Alberta Securities Commission
(1987) in Zaid at 2-114 – the Alberta Discussion Paper identifies the California statute as
Alberta’s model. California was the first U.S. state to enact franchise-specific legislation in
1970, with the California Franchise Investment Law, California Corporations Code, Division 5,
Parts 1-6, §§31000-31516, online: (date accessed:
May 8, 2007).