Bill 33 - The Franchise Disclosure Act

BILL 33 - THE FRANCHISE DISCLOSURE ACT
March 2000

The Legislation:
   The Honorable Mr. Runciman, Minister of Consumer and Commercial Relations,  introduced Bill 33 on December 14, and an NDP member offered a related Private Member's Bill on the following day. A copy of Bill33 is available here . This is the first legislation affecting Ontario's franchises since the 1970s. For a discussion of the legislation see: "Canadian Regulations: Ontario Legislature Moves Quickly on 'Franchise Disclosure Act'", M. Cohen, Franchising and Business Law Alert, Vol.6, No. 4, Jan. 2000, p.4.(available on Lexis/Nexis) See also the very helpful law firm website: www.franchiselaw.ca and especially the section, "13 Things Journalists Should Know About the New Ontario Franchise Legislation".

The Business of Franchising:
The franchising sector plays a significant role in the economy of Ontario. According to statistics provided by Paul Berton:
- 40,000 people own franchises in this province;
- 45% of all retail sales in Ontario took place in franchises;
- 600,000 people are employed by the sector and
- $4 billion is invested by franchisees each year in Ontario.
("Committee to Study Franchise Act", London Free Press, Feb. 8, 2000, p.d1. For additional information about the industry see Strategis )

Additional Reading:
    "New Ontario Franchise Legislation Means a Level Playing Field", Canada Newswire,Dec. 21, 1999.
"Disclosure Key to Franchise Act," Joe. Paraskevas, London Free Press, March 10, 2000.
"Making the Big Guys Play Fair", Maryanna Lewyckyj, The Toronto Sun, February 8, 2000.
"Franchise Legislation Might Get More Teeth," John Southerst, Globe & Mail, March 17, 2000.

        One of the goals of the legislation is to ensure that the franchisees are provided with better and more complete information. In the United States, such information is made available in most states in the "Uniform Franchise Offering Circular" (UFOC) which was introduced in 1975 and updated in 1993. For a good discussion of UFOCs see the Journal of Accountancy, Vol.186, No.3, Sept. 1998 which is available in the Business Library and on ProQuest where many more articles about franchising may be found. For data based on UFOCs see The Profile of Franchising, BUSREF HF 5429.23P76 1998.

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