Franchise disclosure document

How BC law treats it

Under BC's Franchises Act, SBC 2015, c 35, s. 5, the disclosure document must be delivered at least 14 days before the franchisee signs any agreement relating to the franchise or pays any consideration. Late or deficient disclosure gives a right of rescission within 60 days of receipt, and no disclosure gives a right of rescission within two years after entering into the franchise agreement (s. 6).

What it means for your business

A prospective franchisee should not sign or pay anything until 14 days after receiving a complete disclosure document.

Risks and common mistakes

A deposit or binding agreement signed before proper disclosure may give rise to rescission rights, but recovering money from the franchisor can still be difficult.