Underneath the Golden Boy - Robson Hall Faculty of Law

Franchise Law Consultation Paper 2007 283
The Council concluded that “the costs are worthwhile considering the
benefits that the … Code provides to the franchising industry.” 212
Another commentator suggests:
Although there are compliance costs, it is arguable that this creates an appropriate barrier
to entry. If franchisors cannot afford the relatively modest cost of preparation of a
franchise agreement and disclosure document, they ought not to be attempting to
franchise. 213
It should also be noted that Manitoba does currently regulate certain
ongoing commercial relationships; legislation amending The Farm Machinery
and Equipment Act to govern farm equipment dealerships was enacted in May
2000. 214 The amendments prohibit the practice of ‘dealer purity’, so that a farm
equipment manufacturer may not prevent a dealer from carrying competing
equipment lines and products. A manufacturer may also not discriminate among
similarly situated dealers or terminate a dealership agreement without cause. In
most cases a court order is also required. The Act also provides for the court to
appoint a mediator to mediate disputes on the request of one of the parties to
the dealership agreement and requires the parties to participate in good faith. 215
B. If Legislation Is Desirable, What Elements Should Be Included
If Manitoba legislates to regulate franchising, a degree of uniformity with the
franchise legislation of other provinces will no doubt be desired. The trend
toward harmonized franchising legislation in Canada is consistent with the
principles of the Agreement on Internal Trade and can be expected to
contribute clarity and certainty to the commercial franchise environment. If
regulatory requirements are consistent across provincial boundaries, barriers to
the movement of goods, services and investment may be reduced, and
franchisors will have little non-market incentive to choose to conduct business
in one province over another.
The existing Canadian statutes are relatively consistent in their approach to
regulation, and focus primarily on requiring pre-contractual disclosure. However,
212
Ibid. at 56.
213
FCA and the Franchising Code of Conduct (May 17, 2006), Franchisebusiness.com, online:
(date accessed: May 12,
2007).
214
The Farm Machinery and Equipment Act, C.C.S.M. c. F40.
215
Some dealership arrangements may fall within the definition of ‘franchise’ used in Canadian
franchise legislation. If franchise legislation is enacted in Manitoba, it will be necessary to
consider the effect of any inconsistency between the farm equipment dealership provisions and
the franchise provisions.