Buying a Franchise in Canada: Choosing Independent Advisers

Buying a franchise means joining a network while taking on your own legal and financial commitments. The franchisor’s representatives know their business model, but they are no substitute for your own advisers. To get a useful review before you buy, you need to choose professionals with the right expertise, check their independence and specify what they should deliver.

Choose experience that suits your plans

Your usual lawyer may know your circumstances without regularly practising franchise law. A purchase often involves several interrelated documents: the franchise agreement, schedules, personal undertakings and related agreements. A review limited to the main agreement may leave important obligations overlooked.

At an initial meeting with a lawyer, ask:

• Do you regularly review purchases on behalf of franchisees, rather than only acting for franchisors?
• Are you familiar with the rules in the province where the business will operate?
• Does the scope of your work include the schedules and other proposed commitments?
• Who will actually carry out the review, and who will answer my questions?

When choosing an accountant, look for experience with small businesses and franchise models. They should be able to cross-check contractual obligations against the financial documents, identify assumptions that lack sufficient support and explain the implications for your plans.

Ask for an anonymised example of how they work, rather than a promise of results. No reputable adviser can guarantee a franchise’s success. Their value lies in making the risks understandable and identifying the checks still needed.

Check independence and agree fees

You do not necessarily need to reject a recommendation from the franchisor. However, you should still check whose interests the professional represents. Ask whether they currently advise the franchisor, a related company or any other party to your transaction, and whether they receive any payment linked to your referral or the completion of the purchase.

The lawyer must check for conflicts of interest in accordance with their professional obligations. Do not assume that the lawyer preparing the franchisor’s documents also protects your interests. Appoint your own adviser under a separate engagement.

Have the following confirmed in writing:

• who the client is, particularly whether this is you personally or your company;
• which documents and questions the review covers;
• the fees, how they are calculated and any additional expenses;
• what work is excluded and the conditions for exceeding the agreed scope or budget;
• deadlines and communication arrangements.

Compare proposals on a like-for-like basis. A brief review followed by a phone call is not the same service as a written report followed by discussions with the franchisor. Also agree who will authorise additional work if revised documents arrive.

Plan the review around provincial rules

The legal framework for franchising varies by province. Your lawyer’s first task should therefore be to establish the applicable rules, disclosure obligations and timetable before you make any commitment.

In Ontario, the Arthur Wishart Act (Franchise Disclosure), 2000 generally requires, subject to statutory exceptions, a disclosure document to be provided at least 14 days before a franchise-related agreement is signed or a payment is made. This document includes financial information, costs and proposed agreements, among other things.

This statutory period does not guarantee that your team will have finished its work. Forward documents as soon as you receive them and have the timetable checked before signing or paying. A last-minute request for a review may prevent a thorough assessment.

Quebec has no specific franchise disclosure legislation comparable to Ontario’s. The general rules of the Civil Code of Québec, particularly those relating to contracts and good faith, apply. Your lawyer should therefore specify what information to request, without assuming that Ontario’s waiting period applies.

Ask for a coordinated, actionable conclusion

Give your advisers the same dated, organised set of documents: everything received, proposals, schedules and relevant correspondence. Flag every new version. This avoids the accountant working with costs that the lawyer already knows have changed.

Then ask for a summary that distinguishes between verified facts, missing information, obligations whose costs need to be calculated and points requiring a decision. The lawyer explains the scope of an obligation; the accountant assesses its financial impact. Neither should assume that the other has addressed an issue without confirmation.

Before committing, arrange a short joint discussion to resolve any inconsistencies. The final decision is yours, but it should rest on explicit conclusions, not on silence interpreted as approval.

Key takeaway: choose your advisers before setting a signing date. A written scope of work, verified independence and a coordinated summary make their input genuinely useful.