The Opposition is calling on the provincial government to step up the pace on introducing legislation that would better protect franchisees in British Columbia.
“Government has done a consultation at this stage, but there’s no commitment to produce a franchise act or franchise legislation from the government,” said Carole James, NDP MLA for Victoria-Beacon Hill. “What we said today is that there’s urgency.”
Last March, the British Columbia Law Institute released a report recommending that B.C. adopt a franchise law, similar to legislation already in place in five other provinces.
That report included draft legislation which would regulate the sale of franchises, stipulate exactly what disclosure is required before a sale is completed and provide more legal rights for franchisees to help parties resolve disputes.
The B.C. government concluded a consultation process on the proposed law in December. However, there is no indication that the legislation will be introduced in the upcoming spring session of the legislature, James said.
Kulwinder Sahdra is a former franchise owner who believes a franchise law would have given her more protection when she tried to sell her Blenz franchise at West Broadway and Maple Street in Vancouver.
She claims the company rejected three potential buyers without explaining why. When she hired a lawyer to deal with the company, a sale was finally approved, but by then she had fallen behind in royalty payments to Blenz and ended up having to sell her house to cover her costs.
Former Blenz franchisee Wayne Taylor, who spoke to Business in Vancouver about the issue in October, has a similar story; in a response to a lawsuit Taylor filed against the company, Blenz said it was not aware of potential buyers and was not obligated to approve a sale.
“I was in tears because I was thinking, is it ever going to happen?” Sahdra said. “When you work for somebody, at least you can quit and leave.”
Bulk purchasing agreements, where franchisees are required to buy basic supplies from the franchisor but at a higher cost than what they would pay otherwise, can also tilt the playing field to the franchisor, James said. Sahdra said her agreement included a bulk purchase agreement for items like milk, but at a higher price than grocery store prices.
A franchise law would help franchisees understand all the consequences of an agreement so they can make a more informed choice, James said, comparing the proposed legislation to what is currently in place for sellers and buyers of real estate.
In an email, Ministry of Justice staff said the ministry is reviewing stakeholder feedback and preparing recommendations. The ministry could not confirm when the legislation would be introduced.
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