Underneath the Golden Boy - Robson Hall Faculty of Law

Response to Consultation Paper on Franchise Law 349
encourages doing so. 182 The disclosure form provided under the Regulation’s
schedule in section L pertains to seeking advice. It states:
It is strongly recommended that you talk to your lawyer about this reverse mortgage
before you sign the mortgage or any other document that requires you to sign the
mortgage. 183
Because reverse mortgages are complicated, and many borrowers lack the
background and expertise to evaluate both the suitability of the mortgage for
them and the terms of the mortgage offered to them, independent advice and
counseling should be sought by most prospective borrowers. 184 This argument
could also be applied to franchising.
In contrast to all Canadian franchise legislation, Australia’s legislation
requires that a franchisee attain independent legal advice prior to entering into a
franchise agreement. Under section 11(2) of the Trade Practices Act 1974, a
franchisor must receive from the prospective franchisee prior to entering into the
franchise agreement the following:
(a) Signed statements, that the prospective franchisee has been given
advice about the proposed franchise agreement or franchise business, by
any of:
(i) an independent legal adviser;
(ii) an independent business adviser; (iii) an independent
accountant; or
For each kind of statement not received under paragraph (a), a signed
statement by the prospective franchisee that the prospective franchisee:
(i) has been given that kind of advice about the proposed franchise
agreement or franchised business; or (ii) has been told that that kind of
advice should be sought but has decided not to seek it.185The
subsequent section qualifies subsection 2 by stating that its does not
apply to the renewal or extension of a franchise agreement and that it
does not prevent that franchisor from requiring any or all of the
statements mentioned in paragraph 2(a). 186
182
Man. Reg. 65/2002.
183
Ibid.
184
(2006) “Manitoba Law Reform Commission Review of the Garnishment Act,” Commonwealth
Law Bulletin, 32:1 103-139 online: at 137.
185
Australia, Trade Practices (Industry Codes – Franchising) Regulations 1998, supra note 48 at s.
11(2).
186
Ibid. at s. 11(3).