Franchising in Manitoba: understanding the right to associate

Buying a franchise means joining a community while remaining responsible for your own business. Before committing to a franchise in Manitoba, examine how franchisees can make their collective voice heard. Being able to share views and organise does not mean you can change the brand’s rules, but it is an important protection to understand before signing.

1. Understand the protection available in Manitoba

In Manitoba, The Franchises Act and the Franchises Regulation, in force since 1 October 2012, govern matters including pre-contractual disclosure. The Act also protects franchisees’ right to associate with other franchisees. This protection applies to both new and existing franchise relationships.

The Manitoba government’s guide explains that a franchisee can bring a claim for damages against a franchisor that penalises them for exercising this right. It is therefore not simply a benefit granted at a brand’s discretion.

The Act also places both parties under a duty of fair dealing when performing the agreement. This includes acting in good faith and in accordance with reasonable commercial standards. It does not, however, guarantee that collective requests will be accepted or that every disagreement will have a favourable outcome.

The right to associate is not a right of veto. An association does not replace the agreement or release a franchisee from their obligations. Before buying, ask your lawyer to explain the scope of these protections in your circumstances. Do not assume that Manitoba’s rules apply to a franchise in another Canadian province.

2. Distinguish between an independent association and an advisory council

A brand may have a franchisee advisory council, an independent association, both or neither. A body’s name alone does not tell you how independent or influential it is.

An advisory council may gather feedback on operations and discuss proposed changes. An independent association may organise discussions among its members and raise shared concerns. In either case, check its actual powers rather than making assumptions.

Ask for clear answers to the following questions:

• Who chooses the representatives: the franchisees or the franchisor?
• Who sets the agenda, and who can propose a topic?
• Can franchisees meet without the franchisor present?
• Are there a constitution, written terms of reference or operating rules?
• Are its recommendations advisory, or do certain decisions require agreement?
• Who funds the body, and what membership fees are charged?

The absence of an association does not, in itself, indicate a problem. However, any sales pitch promoting ‘a say in decisions’ should be checked against the powers actually provided for.

3. Check the documents before committing

Ask for the operating rules and membership conditions of any existing bodies, along with examples of meeting minutes where these may be shared. The aim is not to obtain confidential information, but to understand how a collective issue is considered and followed up.

Then ask your lawyer to review these documents alongside the franchise agreement and related commitments. Draw their attention in particular to clauses covering confidentiality, public communications and dispute resolution. Ask how these interact with the statutory right to associate.

If a clause appears to prohibit franchisees from organising or to penalise participation in an association, do not settle for a verbal assurance that it will never be enforced. Obtain legal advice and have the wording clarified before signing.

Your budget should also account for any membership fees and the time needed to participate. Distinguish between compulsory contributions set out in the contractual documents and voluntary membership fees. Ask who can change them and what procedure they must follow.

4. Assess how collective dialogue works in practice

To assess how the arrangements work, look for a concrete example: a shared problem raised, a response from the franchisor and a follow-up communicated to franchisees. A documented process will tell you more than a general promise to listen.

If you speak to representatives, ask how they gather differing views and report back on their work. An association does not necessarily speak for every franchisee on every issue.

After buying, retain relevant communications if you believe you are being penalised for participating. Consult a lawyer promptly rather than unilaterally withholding payments or suspending your obligations. The existence of a legal remedy does not make every response appropriate.

Key takeaway: before signing in Manitoba, check three things: your legal protection, the independence of any collective bodies and their powers as set out in writing. This will help you understand how to make your voice heard within the franchise community without confusing consultation with decision-making.