How Franchise Law Works in Ontario

Did you know that there are only two provinces in Canada with legislation specifically intended to govern parts of franchising? Ontario and in Prince Edward Island. In Ontario, it’s the Arthur Wishart Act (Franchise Disclosure), administered by the Ontario Ministry of Consumer and Business Services, which legally define business “franchise.” This means, that many franchise agreements between distributors and dealers are protected by the Act’s requirements.  

The Arthur Wishart Act

The Act is intended to provide a franchise agreement, fair dealings and honest business practices between the parties involved. Specifically, this regards the Disclosure Document that franchisors are required to provide to potential franchisees. The Disclosure Document must be accompanied by the proposed franchise agreement in order for the agreement to be valid, including financial statements, and all other material facts. The Disclosure Document must also contain a certificate that states that the Disclosure Document does not contain any misrepresentation.

Franchisee Obligations

As a potential franchisee considering the terms of a new franchise agreement, it could get too complicated for you to handle on your own. Getting a franchise lawyer who can help you understand exactly what you’re getting into and will protect your best interest is very important for protecting such a big investment. Your attorney can explain what your rights and obligations under the agreement would be, negotiate on your behalf, and help you draft a revised agreement if needed.  

Professional Franchise Lawyers

If you’re considering buying a franchise in Vaughan or the Greater Toronto Area, contact the experienced franchise lawyers at Law Works. Where you are connected with a team of franchise support professionals to guide you on your path to owning your own successful franchise.

 

What to Look For in a Franchise Lawyer

When looking for a business lawyer to handle your franchise dispute, there are multiple aspects to look at before making a decision. Primarily, it is important to choose a team that is experienced in this field, as well as expertise in other areas of the law well; demonstrating a well-rounded understanding of the law. Finding a lawyer who has dealt with cases similar to yours will not only give you peace of mind, it will demonstrate an outcome that you will likely reach as well.

Secondly, as you will be advised and represented by the team you choose, it is best you can work well with them. You want to choose a franchise lawyer that you will agree with and share an understanding of your problems and desired solution.

Here is a list of qualities to look for in a franchise lawyer:

• Strong communication skills: you want to be able to understand what your lawyer is saying! Find a team that clearly explains the process, without stuffing confusing jargon into their explanations.
• References and rapport: ensure they have experience in this field and have handled similar cases.
• Sensitivity: your lawyer should understand the situation you’re in and the stresses that come with it!

At Law Works, their team of professional lawyers will not only help you with your franchise disputes in Ontario and British Columbia, but they also share the qualities listed above. If you need representation or advice with your franchise dispute, contact Law Works. They are able to provide you with everything you’re looking for in an expert franchise lawyer. 

Steps to Resolving Franchise Disputes

There is no such thing as a long-lasting relationship without any disagreements. However, as time passes, things will inevitably change. The original relationship entered into gets altered one way or another, and people involved tend to want different things the other party may not. This is when disagreements can occur. The same idea happens with franchise agreements, and it’s a very common thing. So, don’t let it get you down if you’re experiencing a dispute with your franchisor.

Here are steps you can take to try to resolve your franchise disputes:

Step 1

Let the franchisor know what is the incurring problem. Write a summary that is factual, clear and concise. Advise the franchisor how the problem has affected certain aspects of the business and what your proposition to solve the disagreement. This proposal has to be documented in writing, properly dated and provided to the franchisor in this manner.

Step 2

Speak to the franchisor about the issues raised in the written request. Attempt to reach a resolution and written agreement.

Step 3

If you are unable to solve the dispute and reach a mutual agreement with the franchisor, speak with your franchise lawyer about handling the case – some legalities may be too complex with contractual disagreements. Your franchise lawyer will work for your best interests and fight for the best possible resolution that you may be entitled to. Allow your lawyer to carefully examine your franchise agreement and determine the next course of action.

Step 4

At this point, if a resolution has not yet been reached, your lawyer may recommend taking your issues with the franchisor to mediation. This is a mandatory process that is required by the rules of the court.

Step 5

If a resolution is not reached through mediation, your lawyer will determine whether or not arbitration is an appropriate procedure. They will determine the next course of action based on the enforceability of arbitration and the cost with your best interest in mind.

Contact a Franchise Lawyer

If you haven’t done so already, speak to a franchise lawyer about any disputes you are experiencing. Receive legal advice to help you reach a resolution. Contact a Franchise Lawyer in Mississauga at Law Works, it never hurts to speak to someone who has substantial experience in franchise business matters.

Why You Need To Hire a Franchise Attorney

Before signing a business contract, you need to protect yourself legally — and there’s only one way to do it. You need to hire a franchise attorney. Here are some reasons why:

All franchise owners are required by law to receive the Franchise Disclosure Document (FDD) before they buy a franchise they’re interested in. This is a long document that can be difficult to understand without a background in law. Franchise lawyers are familiar with business law and the premises associated with franchise law. They know exactly what to look for and can thoroughly explain the details about Franchise Disclosure Documents.

Franchise lawyers can also provide sounds advice on choosing a business entity that would be a good fit for you. They can tell you how to set up a business, determine your legal rights, liabilities and even how you will be taxed.

As with most business owners, franchisees don’t expect to fail and shouldn’t go into a new business opportunity without understanding the business model. However, it’s always smart to ensure that if things do go wrong you are legally covered. When you hire a professional business lawyer with expertise in franchise law, they will ensure you are not signing a contract or getting caught in a legal bind that could potentially hurt you in the future. Whether you get sued or you sue your franchisor, a franchise lawyer will protect you before such occurrences happen. 

Hiring a lawyer ensures you are performing your due diligence and agreeing to everything provided in documents from the franchisor. Many franchises may say the contract is non-negotiable so why bother hiring a lawyer, when in fact you’re protecting your own rights and financial investment. As the saying goes, “better to be safe than sorry.”

If you’re ready to purchase a franchise and want to hire a lawyer with experience in the franchise field, contact Law Works in Guelph. They can help you get started with a team of professional franchise lawyers and answer any question you may have. 

How Does Franchising Work?

When it comes to business franchising every company starts small. It starts with someone coming up with their own business, including name, idea, business model and plan. From there it grows until a decision is made to expand the company to other locations. The founder may be able to control 2 or 3 other locations, but eventually, multiple locations will too much to handle. At this point, this acquiring new franchises occurs.  

What is a Franchisee?

A franchisee is someone who uses a company’s licensed, trademarked and proven business methods to own a piece of a franchisor’s company. The franchisee must make a payment, a percentage of gross sales, or a fixed fee depending on the contract both parties agree to. They do not get a stake in the company but do attain a piece of ownership within certain limits.

Franchisors’ Point of View

For the franchisor it’s simple. As the business grows, it looks to expand into new areas and markets while still maintaining control and profitability of the business — which is performed by and still makes money off those expanded locations. The biggest risk franchisors face when doing this is having a franchisee possibly ruin the company’s reputation, by not following internal guidelines and doing something without any consultation or advice. Although this is a rare occurrence, franchisees are carefully picked and have obligations to follow rules in their contracts — if contractual obligations are not followed the franchisee becomes a company liability and could be sued by the franchisor. 

The Franchisee Benefits

The benefits from a franchisee’s point of view consist of a few things. They get to run their own business without having to worry about business models, marketing, renovations etc. While bigger functions of running a business are taken care of they still have to manage the location, hire employees and maintain the day-to-day operations of the business. Right from the beginning, a franchise business is a well-established business with support from the franchisor or corporate head office. 

Franchise Expansions

More so, a franchisee can even expand and own multiple franchise locations. However, they first need permission from the franchisor as well as go through the process of applying and qualifying for another location.  Franchises are a great way to ensure success when starting your own location but still need to be carefully looked into and taken care of.

If you’re interested in purchasing a franchise or looking for more information,  contact Law Works in Waterloo.  They can help you get started with a team of professional franchise lawyers for all your business needs. 

How To Choose Which Franchise To Open

When choosing what franchise to consider there are many factors to weigh such as location, type of business, and demographics in your city. When you’ve figured out which business market you want to explore, it’s important to find a business that fits your budget with a good reputation.

If you’re exploring franchises in a populated you might come into competition like Walmart. When it comes to companies with similar products such as McDonalds Tim Hortons or Starbucks if there’s one located close by in a high traffic area it may still be beneficial to open in that location.

If your budget can’t afford a popular franchise, it is important to choose one that you believe can still stand out and be competitive in your market. Again, location and surrounding is very important. When deciding what business to invest in, always consider your area, logistics, supplier and advertising budget. This way you’re aware of the business model and structure for potential revenue and sales.

If you’re interested in purchasing a franchise, get help from experts who can fully explain what you need to do to get started. Contact Law Works in Waterloo, they can explain the true values of a franchise.

 

Why Franchising May Be Better Than Opening Your Own Business

There is a lot of talk on whether or not franchisees have a higher success rate than independent small businesses. Some sources may state otherwise, while others believe it’s the best decision. No matter what you choose, it really depends on numerous factors. One of the biggest factors in deciding if you should franchise or open independently is determining the business model, location and target audience.  

Location, Location, Location

For example, if you’re located in a small town with limited restaurants opening your own business can be successful as long as your food and service are good. However, if you open a well know franchise such as McDonald’s or Tim Horton’s, you may be more successful as people in and around your town may choose your location then driving to a further one. However, if you open in a high traffic area chances are your own business might fail and depend on how popular the franchise is it can either strive or fail as well.  

Business Competition

The difference between having your own business and franchising is simply having to prove your worth. With a new business, you have to attract people and prove that they should visit you and come back in the future. However, choosing a franchise is a shortcut to bypass building brand recall. If your franchise brand is already established, all you need to do is maintain customers’ level of expectation to remain competitive.

Branding & Customer Experiences

Branding and customer experiences also apply to other kinds of businesses too. Franchising may be the way to go if you want to sell products that are consistent, in terms of the customer journey. When you franchise, you’re buying into a set business model with suppliers and resources. When you choose a franchise, your business decisions are limited to ordering from different vendors or worrying about inventory shortages. Furthermore, new innovations are determined by the franchisor to create new recipes or products. Everything is dealt with and you have access to all the same resources as your fellow franchisees.

Franchise Business Lawyer

If you’re interested in purchasing a franchise, get help from experts who can explain what you need to do to get started when owning a franchise. Contact Law Works in Guelph, they can guide you in understanding the full scope of becoming a franchise owner.

What Are Mediation & Arbitration Clauses for Franchises?

 

A franchise agreement is a legally bound agreement outlining the franchisor’s terms and conditions for the franchise. Additionally outlined are the obligations of the franchisor and the obligations of the franchisee.

Mediation Clause

Mediators are facilitators, who work with both parties to create a solution to the problems between the parties.  However, the mediator does not make the decisions for the parties, the parties do. When a dispute arises, it is beneficial to have a mediator at your disposal. They will work to achieve with the parties, a mutually acceptable resolution to the dispute.

Arbitration Clause

Any dispute or controversy to arise in connection with the agreement, between the parties, are to be decided by an arbitrator (agreed upon by the parties). It is a binding legal process where parties have submitted, by written agreement, that a dispute between them be resolved by a neutral, third party (the arbitrator).

Mediation and Arbitration Clause Combined

In default of resolution at the mediation, the dispute is to be determined by an arbitrator agreed on by the parties. If you’re interested in purchasing a franchise, get the help you deserve. Contact Law Works in Guelph, they can help you solve disputes easily with a team of professional franchise lawyers. 

How to Find a Franchise Lawyer

As a franchisor, one of the most critical decisions you will make is choosing the right franchise attorney. Franchise lawyers are essential for any franchise owner: documents crafted by your attorney, advice and legal guidelines provided, all having a huge impact on your business. They can determine the most effective ways to run your business while ensuring that your operation isn’t violating any laws. How can you ensure you’ve found the right franchise lawyer?

A critical factor is to receive multiple referrals from franchise professionals. If you choose to search for the perfect franchise lawyer yourself, a crucial determining factor is the amount of experience the attorney has. You want them to have franchise law as their area of practice and many years of it.

Once you have selected the attorneys for consideration, it is important to ask questions that are essential to you as someone who will be franchising a business:

Transactional vs. Litigation Focus

You need a lawyer who is focused on the transactional side, to focus their practice on the preparation of your legal documents. However, a benefit with a lawyer having a litigation practice is them being able to represent you if needed.

Flat Fee vs. Hourly

The benefits of working with a flat fee franchise lawyer are that their fees are predictable and often maybe financed over a few months, also if the case takes more time you benefit, however, this can also be negative in the reversed scenario.

Industry-specific Knowledge

You need someone who is knowledgeable specifically in your industry and who knows additional regulations that impact a business.

Firm Size

A larger firm might be able to do more for you and bring in resources, such as a specialist to help with other transactions or work. They also could have more connections however, a smaller firm will provide you with more access to a partner level attorney and may be cheaper.

If you’re interested in purchasing a franchise, get the help you deserve. Contact Law Works in Waterloo, they can help you solve disputes easily with a team of professional franchise lawyers.

3 Things To Consider Before Signing Your Franchise Agreement

Franchises offer a balance between the freedom of starting your own business and the stability of an established brand. Unlike starting a business from scratch, purchasing a franchise offers access to resources, capital, brand identity, and other extremely helpful assets that can help your business thrive. However, there are a few things you should consider before signing your franchise agreement and opening your new franchise:

How much will it cost?

Starting a business can be extremely expensive, which is why franchising can be such an attractive opportunity. While the costs are still substantial, you may be able to get funding from the franchisor or use the brand’s reputation to help obtain a loan from a bank. Before signing your franchise agreement, make sure to consider exactly how much it’s going to cost and how you’re going to finance this new venture.

Is it right for you?

Franchising exists in a number of industries, not just fast food. As a potential business owner, determine whether your skill set and passion align with the needs and goals of the franchise. While it’s possible to run a successful franchise with no prior experience, being passionate or knowledgeable about the industry before signing your franchise agreement can be extremely helpful.

How much time can you invest?

Opening a franchise is just like opening your own business. It requires a lot of time and commitment to ensure everything runs smoothly. If you are already employed or have other commitments, consider if you’ll have enough time to dedicate to opening your new franchise.