Underneath the Golden Boy - Robson Hall Faculty of Law

Franchise Law Consultation Paper 2007 249
1971 Alberta Act was a registration statute that required prospective franchisors
to register with the Alberta Securities Commission and to file certain
documents, including a prospectus. The Act prohibited trading in a franchise
without registration. Franchise salespersons were also required to register with
the Commission. 73
Under the 1971 Act, the Alberta Securities Commission carried out
activities to oversee and regulate franchise activity, including reviewing
prospectuses to determine compliance, investigating complaints and imposing
sanctions for breaches of the Act. In addition, the Commission set policies that
governed franchisor-franchisee conduct, covering matters such as standards for
additional franchisor disclosure and for the termination of franchise
agreements. 74
By the late 1980s, concerns had arisen about the cost, administrative burden
and delay associated with the registration and disclosure requirements. 75 The
Alberta Securities Commission requested public comment on amendments to
the Act in 1991, which was followed by the introduction of a bill to replace the
Act in 1992. 76 However, the 1992 bill did not receive second reading. In 1995,
following further public consultation and advice from a committee including
representatives of the Canadian Franchise Association, the former Alberta
Franchisors’ Institute and the Franchisee Association of Alberta, 77 the Alberta
Government replaced its regulatory structure with a new Franchises Act and
regulations. 78
73
Franchises Act, R.S.A. 1980, c. F-17 (repealed).
74
Zaid, supra note 1 at 2-110 to 118M. Zaid argues, at 25, that with these policies, “the Agency’s
mandate [had], in some instances … been taken beyond the realm of administering and into
the realm of franchise relationship legislating”.
75
Alberta Ministry of Consumer and Corporate Affairs, Discussion Paper on the Alberta
Securities Commission (1987) in Zaid, supra note 1 at 2-114. Typical registration costs for
franchisors were reported to range between $10,000 and $20,000, and these costs, along with
the inconvenience of registration, were thought to discourage potential franchisors from
carrying on business in Alberta. The government also incurred costs in administering the Act.
76
F. Zaid, Franchise Law (2005) at 25-26; Bill 45, Franchises Act, 22 nd Legislature, 4 th Session,
Alberta, 1992-93.
77
Zaid, supra note 5 at 26.
78
Franchises Act, R.S.A. 2000, c. F-23 [Alberta Act]; Franchises Regulation, Alta. Reg. 240/95
[Alberta regulations]. Dillon notes that the 1995 Alberta Act closely resembles the Model
Franchise Investment Act developed by the North American Securities Administrators
Association [NASAA], a body that addresses the harmonization of securities laws in North
America: P. M. Dillon, Ontario's Franchise Regulatory Regime: Why Ontario Should Get
Active in NASAA, Siskind, Cromarty, Ivey and Dowler LLP, London, Ontario, online:
(date
accessed: May 8, 2007)