Franchising in Canada: planning ahead for operating permits

Your business already has the authorisations it needs to operate. That does not mean a franchisee can open elsewhere using the same documents. To build a franchise network in Canada, you need to turn the steps completed for your own outlet into a repeatable process, without assuming that requirements will be identical from one municipality to another.

1. Distinguish between business and premises authorisations

Start by listing the permits, registrations and authorisations your existing business uses. For each one, record the relevant authority, the holder, the authorised activity, the address covered, any specific conditions and any expiry date.

This review will help you distinguish between three categories:

• Requirements relating to the operator, such as certain business registrations or professional qualifications, depending on the activity.
• Authorisations relating to activities, such as those that may apply to food preparation or alcohol sales.
• Authorisations relating to the premises, including those that may cover the use of the premises, building work, occupancy or signage.

These examples are not a universal checklist. Requirements depend on the activity and the authorities involved. A permit issued to your company for your address does not automatically cover an independent company operating elsewhere.

Create a record for each authorisation. Add one essential question: can it be transferred, or must the new operator submit a separate application? Have the relevant authority confirm the answer rather than relying on past practice.

2. Link this inventory to pre-contractual disclosure

In Canada, franchise-specific regulation is a provincial matter. Disclosure requirements should therefore not be treated as a single, uniform national formality.

In Ontario, the Arthur Wishart Act (Franchise Disclosure), 2000 requires, among other things, a disclosure document to be provided at least 14 days before the signing or payment covered by the Act, subject to applicable exemptions. Its regulation, O. Reg. 581/00, General, requires a description of every licence, registration, authorisation or other permission that the franchisee must obtain under federal or provincial law, or a municipal by-law, to operate the franchise.

A simple statement that ‘the franchisee is responsible for all permits’ is therefore no substitute for the description required by the regulation. Have the information checked to ensure it reflects the activities actually being offered and the proposed location.

In Manitoba, The Franchises Act and the Franchises Regulation, M.R. 29/2012, also govern pre-contractual disclosure. Before expanding your network into another province, have the local requirements reviewed rather than automatically reusing your Ontario disclosure package.

Finally, distinguish between disclosure and regulatory authorisation: in Ontario, the government does not approve franchisors or their disclosure documents. A disclosure package is not a permit to operate.

3. Allocate tasks before committing to an opening date

For each authorisation, assign responsibility for four tasks: preparing the application, submitting it, paying the fees and retaining proof. The franchisor may provide plans or technical descriptions, while the franchisee may need to apply in their own name. This allocation must comply with the relevant authority’s rules.

Next, record any dependencies. An application may require finalised plans, an inspection or the completion of building work beforehand. Your opening schedule must allow for these stages without presenting an estimated processing time as a guarantee.

Before announcing a date, check in particular:

• whether the proposed activity is permitted at the chosen location;
• which technical documents must accompany the applications;
• which inspections are needed before opening to the public;
• who decides to postpone the opening if an authorisation is missing.

Following legal review, the contract should set out responsibilities and the consequences of a delay or refusal. Avoid promising that an authorisation will be obtained when the decision rests with a public authority.

4. Test the process, then monitor deadlines

Use your existing outlet to reconstruct the administrative process: applications, correspondence, inspections and conditions imposed. This exercise often reveals steps that the founder handled personally without documenting a process others could follow.

Then test the checklist against the requirements of another municipality. The aim is not to apply for every permit prematurely, but to establish which steps differ and which questions remain unanswered.

After opening, maintain a register of deadlines and conditions for keeping authorisations valid. Arrange a review whenever an outlet changes its activities, premises or operator: these changes may require further applications or procedures.

Key takeaway: before offering a franchise, prepare an authorisations matrix identifying the holder, the person responsible, the supporting documents required and the deadlines. Have it checked for each location: your initial experience is a starting point, not permission to operate everywhere.