Buying a Franchise in Canada: Choosing Your Lawyer

Buying a franchise means joining a community while taking on legal commitments that may last for several years. A good lawyer does more than summarise a contract: they help you distinguish acceptable risks from terms that need clarifying before you invest. Here is how to choose that adviser and agree a scope of work that meets your needs.

1. Look for experience relevant to your plans

A lawyer with expertise in commercial law does not necessarily advise franchise buyers regularly. Look for practical experience working with franchisees in the province where your business will operate. Opening a new outlet, buying an existing business and committing to several units each present different challenges.

At your first meeting, ask specific questions:

• Do you regularly advise prospective franchisees, rather than just franchisors?
• Are you familiar with the rules that apply in the province I am considering?
• Have you handled acquisitions similar to mine?
• Who will actually review the documents and answer my questions?
• Can you coordinate your work with my accountant and lender?

Check their professional standing with the relevant provincial legal regulator. Also ask how the firm handles matters involving several provinces: additional local advice may be necessary.

An online ranking or recommendation is a starting point, not proof of suitability. Prioritise a professional who can clearly explain their approach and the limits of their role.

2. Confirm their independence and scope of work

The franchisor’s lawyer represents the franchisor, even if they are happy to answer your questions. You need an adviser whose job is to protect your interests and explain the consequences of your own commitments.

Before sending confidential documents, provide the names of the franchisor, any seller and the main parties involved so that the firm can check for conflicts of interest. A recommendation from within the franchise network is not automatically a problem, but it does not remove the need for this check.

Also clarify who the firm’s client will be: you personally, your operating company or several business partners. Their interests may differ, particularly where one person invests more or takes on personal obligations. Joint representation is not suitable in every situation.

The engagement letter should specify the documents to be reviewed, the services included and any exclusions. Ask, for example, whether the work covers ancillary agreements, discussions with the franchisor and checking the final versions. An engagement limited to reviewing the contract does not necessarily include negotiation or support through to signing.

3. Insist on an analysis of the applicable provincial law

There is no single federal law governing the purchase of all Canadian franchises. Specific protections depend, among other things, on the province and the scope of its legislation. Your lawyer should identify the applicable legal framework, its exceptions and the rules in force at the time of the transaction.

In Ontario, the Arthur Wishart Act (Franchise Disclosure), 2000 requires, among other things and subject to specified exceptions, that a disclosure document be provided at least 14 days before a franchise-related agreement is signed or any consideration is paid. It also imposes a duty of fair dealing, protects franchisees’ right to associate and provides remedies for disclosure failures. Whether these remedies apply depends on the facts and specific time limits.

In Quebec, there is no specific legislation imposing a general pre-contractual disclosure regime for franchises. The Civil Code of Québec governs matters including good faith, consent and contractual obligations. Rules on contracts of adhesion—contracts whose essential terms are imposed by one party rather than negotiated—may also apply where the relevant conditions are met.

Ask for practical answers: what rights protect you, what obligations will you take on, and what precautions should you take before making any payment? A clause choosing another province’s law does not necessarily displace applicable mandatory protections. This needs analysis, not an assumption.

4. Agree the budget and deliverables

To compare fees, give each firm the same scope of work. Specify the number of documents, the timetable and whether a seller or business partners are involved. Ask whether fees are fixed or charged by the hour, what would trigger additional charges and how you will be notified before the budget is exceeded.

The most useful deliverable is a prioritised summary that distinguishes between:

• significant risks requiring a decision from you;
• missing information that needs to be obtained;
• amendments to request;
• acceptable commitments that you will need to build into your business arrangements.

Arrange a meeting to discuss this summary, followed by a review of the final documents. Your lawyer assesses legal risks; they do not guarantee profitability or access to finance.

Key takeaway: choose an independent lawyer who knows the relevant provincial law, agree their scope of work in writing and obtain prioritised recommendations before you commit.