Updated June 2024
Like all franchising laws in Canada, The Franchises Act in Manitoba is meant to level the playing field between franchisor and franchisee while promoting cooperation and transparency between the two parties.
There isn’t one franchise legislation that applies to all of the provinces in Canada. Rather, each province is responsible for administering their own franchise laws. It’s important that prospective franchisees understand the laws that impact franchising in their region. This will ensure compliance and help set the franchisee up for success.
The following six of the ten Canadian provinces currently have franchising regulations:
What is Included in the Manitoba Franchises Act?
The legislation in Manitoba has been in effect since late 2012, and it imposes various duties and obligations on the franchisor and franchisee. It is similar in scope to other franchise laws in Canada and includes the following:
- Disclosure Requirements (see Franchise Disclosure Document (FDD) Requirements in Canada)
- Fair Dealing
- Right to Associate
- Right to Sue
- Cancellation Rights
- Franchise Agreement Requirements
- Exemptions
- Enforcement and Penalties
- Applicability and Definitions
What About the Franchise Agreement?
A franchise agreement is an arrangement between two parties that outlines how the relationship will work and who is responsible for what. A franchise agreement in Manitoba must address the following:
- Advertising budgets and the territory to be covered by the franchisee.
- How a franchisor’s protected trademarks can be used by the franchisee.
- Lease agreements, particularly that a franchisee’s lease must be similar to the duration of the franchising agreement.
- Instructions on doing business with the franchisor’s preferred suppliers and vendors.
- Expected behavior that will be in line with the practices and policies of the franchise.
What are Some of the Unique Elements of the Manitoba Franchises Act?
Before entering into any type of agreement with each other, both parties must be aware of the full text of The Franchises Act if they plan to open a franchise business in the province.
Although it is quite similar to other franchising laws in Canada, one of the unique features in the Manitoba franchise law is that a franchisor can provide the Franchise Disclosure Document (FDD) in pieces rather than all at once. If a franchisor chooses to distribute the FDD in pieces, then the following rules apply:
- Mandatory risk warnings must be supplied first.
- Pieces of information must be provided together in groups if they all pertain to the same thing (for example, all the information about the franchisor or the list of current franchisees must be provided all at once).
- A specifically worded statement must appear at the top of each segment of the FDD to inform the recipient that it is just one portion of the overall document.
- The signed certificate of the franchisor has to accompany the last portion of the FDD that is delivered.
Like other Canadian franchising laws, the Manitoba legislation stipulates a mandatory 14-day cooling off period, which begins once the final document of the FDD has been delivered. However, even during this cooling period, franchisors can:
- Accept a deposit of up to 20% of the initial franchising fee up to a maximum of $100,000 (this deposit is fully refundable if the potential franchisee backs out before the end of the cooling period).
- Enter into confidentiality agreements and agreements about location selection with the franchisee.
Looking to Buy a Franchise in Manitoba?
If you’re hoping to buy a franchise in the Manitoba province, or really anywhere in Canada, then FranNet is here to help. Our expert franchise consultants can evaluate your specific needs and skills to match you with the right franchise opportunity. We have hundreds of verified brands to choose from. You won’t have to pay us a dime. Schedule your free consultation to get started!