The assessment of whether to purchase a franchised business is a significant one, and prospective franchisees should be making informed investment decisions before signing any franchise agreement.
Franchise law in various Canadian provinces recognizes the importance of franchisees receiving as much information as possible before binding themselves to a franchisor, who is the one who holds considerably more power in the relationship. As a result, Ontario, Alberta, Prince Edward Island, New Brunswick and (later this year) Manitoba, have franchise legislation in place which protects the need for franchisees to make educated investment choices.
This is the purpose of the franchise disclosure document â€” a compendium of information about the franchise system which franchisors are required to provide to franchisees operating businesses in those provinces. The legal requirement to deliver a disclosure document is not taken lightly, and a franchiseeâ€™s right to receive one before signing a franchise agreement cannot be waived by a franchisee. Full article.
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