The obligation of a franchisor to provide franchisees in Ontario, Alberta, Prince Edward Island and New Brunswick with a franchise disclosure document should not be taken lightly.
The document is intended to operate as a type of prospectus franchisees can rely on in making informed investment decisions about entering into the franchise system. As a result, the statutes in the aforementioned provinces set out a detailed list of information that every valid disclosure document must include. Beyond the content, though, are technical timing and format delivery requirements with which franchisors must comply.
The penalties for failing to comply with these legislative requirements are staggering and are a very powerful remedy franchisees should be aware of.