A Franchise Agreement is a complex contract, and franchising is legally very document-intensive. A franchisee should fully understand these legal documents before he or she signs them. Franchises in Canada are governed by not only by federal laws, but also by specific provincial laws.For example, franchisors awarding franchises in Ontario and Alberta are required by law to provide the franchisee disclosure documents at least 14 days before the prospective franchisee pays any money or signs any agreement relating to the franchise. Although these disclosure documents were meant to help the franchisee assess and review his potential investment, they are oftentimes written to put the franchisor and his business in a good light. The best way for a potential franchisee in Canada to protect his interests as an investor is to hire a good Canadian Franchise Lawyer.

Before signing a franchise agreement, a potential franchisee should also consider whether the trademark for the franchise is owned or controlled by the franchisor.Franchise law is closely related to trade marking, and most lawyers of franchise who have a business background are knowledgeable in trade marks, copyrights, and patents. Many are also registered trademark agents.

Doing research to learn as much as he can about franchising will work to the first-time franchisee’s benefit. Working with franchise attorneys who can help the franchisee understand his legal obligations.This can help minimize any risks. It is always best to investigate before investing. The franchising lawyer can also assist with the franchisee’s understanding of the Franchise Agreement, as well as review and negotiate it on behalf of the latter.

There are specific things franchisees need to take into account when working with US-based franchisors.When dealing with a US-based franchisor, the franchisee should ascertain that the franchise agreement has been modified to comply with Canadian laws, customs, and practices. Some franchise agreements may still contain laws specific to the US and not applicable in Canada. Canadian franchising lawyers can inform their clients about these matters, and request the franchisors to modify the necessary clauses.

Other matters that franchisees need to consider and can consult a franchise lawyer about franchise fees and royalty rates; how advertising funds are going to be spent; control of the lease for the franchise location;  rebate percentages from suppliers; extent of the franchisor’s discretion or right of approval; ease of reselling or renewing the franchise business; rights to buying the franchise business itself; and the effects of the Alberta Franchise Act and Franchise Act of Ontario on the franchise.