When people hear the word franchise the first thing that comes into mind would be fastfood as it has always been associated with fast food chains. The franchising business is vast, ranging from perfumes to restaurants. Although very few people know about it as it is compared to a small piece of a bigger puzzle.
But what does it really mean?
By definition, franchise means you’re a clone of a big business (think Dolly the sheep or the Clone Army in Star Wars) where you as the owner of the business had developed a system for replicating a business down to the very last detail and if you’re handling the business, you copy the main business’ methods and carry their trademark.
Simply put, someone gives you a business to run and you run it according to how they want it.
Once both parties have reached a common understanding, a franchising agreement would be written by a lawyer Toronto where a contract would be made between the franchisor and franchisee
The significance of franchising cannot be ignored. It helps in the economy and businesses alike. The bulk of sales made in businesses, especially in fastfood industries, came from franchising as this made it more accesible to consumers. Particularly in areas that are outside the city limits. In the 1980′s franchising was new in Canada and coming up with policies that regulated this line of business was difficult and was not too organized.
The Ontario Act was passed in 2001 to systemize franchising.
Only Ontario and Alberta have franchising laws, but it seems to be the general law in the country According to the Franchise Disclosure Act, for a business to become a franchise, the franchisee has to shoulder the expenses/costs in the operations of the business itself. Specifically if the company gives the franchisee the go-signal to use their brand, marketing tools and products to attract potential customers and also to keep the business running, because of the complexity of franchises, this is why a franchise lawyer is needed.
Businesses would be also considered a franchise when the franchisor has and maintains control over and provide assistance to the franchisee’s operation. The company must give the franchisee also the authorization and rights to run the business as they see fit, even if they have complete control over it, Toronto Lawyers who specialize in franchise law can help with legality issues involved in distribution and sale of goods and services involved in franchising.
This law prevents waiving the rights of the franchisee, protecting the franchisee who is seen as the weaker party in a franchise relationship, especially since they’re given the right to establish franchising organizations that would help them case there are problems with the franchisors or if they are considering entering the franchising business.
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