Franchising in Manitoba: understanding the right to associate

Buying a franchise means joining a community while taking on the risks of running your own business. Being able to exchange views with other franchisees and raise shared concerns is therefore a practical consideration. In the Canadian province of Manitoba, the right to associate is protected by law. Before signing, examine what this protection means and how the franchise network arranges representation for its members.

1. Understand the protection available in Manitoba

Manitoba’s The Franchises Act, in force since 1 October 2012, protects franchisees’ right to associate with other franchisees. A franchisor cannot prohibit or restrict this right, or interfere with its exercise. The Act also provides for a claim for damages where a franchisor penalises a franchisee for exercising their right to associate.

This protection is not limited to new agreements: the provisions on the right to associate also apply to existing franchise relationships. It sits alongside a mutual duty of fair dealing in performing the agreement, which includes acting in good faith and observing reasonable commercial standards.

The same Act and its regulation govern pre-contractual disclosure. Subject to applicable exceptions, the franchisor must provide a disclosure document at least 14 days before an agreement is signed or a payment is made, with specific rules for certain refundable deposits. This period gives you time to examine, among other things, clauses that could affect exchanges between franchisees.

The right to associate does not, however, give you the right to change the agreement unilaterally. It does not exempt you from paying amounts due or meeting your operating obligations. Ask your lawyer to confirm the scope of the protection in your circumstances.

2. Distinguish consultation from independent representation

A franchise network may organise regional meetings, an advisory committee or a franchisee association. These arrangements do not necessarily offer the same degree of independence.

A committee set up by the franchisor may facilitate discussions about operations without independently representing franchisees. An association organised by franchisees, by contrast, may choose its own priorities and appoint its own advisers. The existence of a committee alone therefore does not establish that members have independent representation.

Before buying, ask:

• Who chooses the representatives, and how?
• Who sets the agenda for meetings?
• Can franchisees meet without the franchisor present?
• How are collective proposals responded to?
• Are there membership subscriptions or participation fees?

Also ask for any available rules governing how these arrangements operate. The aim is not to insist on a single model, but to understand whether discussions genuinely allow shared difficulties to be raised. A franchise community can benefit from structured dialogue without every request being accepted.

3. Review clauses that could hinder exchanges

Review provisions on confidentiality, public communications, prohibited conduct and penalties with your lawyer. Their presence is not necessarily problematic: the franchisor may have legitimate interests to protect, particularly confidential information.

The question is whether their wording or application could interfere with the exercise of the right to associate. A very broad ban on discussing any operational matter with other franchisees, for example, warrants careful scrutiny.

Prepare a few practical scenarios for your legal review: attending an independent meeting, contributing towards the cost of joint legal advice or submitting a shared request to the franchisor. Ask what precautions you should take and which restrictions might be incompatible with the law.

Nor does association give you blanket permission to share all information. Customers’ and employees’ personal information must remain protected. Certain exchanges of commercial information between independent businesses may also raise issues under the federal Competition Act. Collective exchanges therefore need an appropriate framework.

4. Plan how to raise concerns and respond to problems

Before committing, identify the people responsible for franchisee relations. Ask how a collective concern is submitted, considered and followed up. A clear procedure helps distinguish an ordinary commercial disagreement from a possible obstacle to association.

If you receive a threat or face adverse action after taking part in a collective initiative, retain relevant emails, letters, meeting notes and dates. The mere fact that a decision follows a meeting does not prove that it is a penalty: the context and reasons must be examined.

Consult a lawyer promptly before withholding payments, publishing allegations or responding to a formal demand letter. They can assess the facts and the appropriate remedies.

Key takeaway: before buying a franchise in Manitoba, check whether franchisees are free to meet, whether their representatives are independent and what the communication clauses say. The right to associate offers practical protection, but it should be exercised with a clear understanding of the legal framework.