What franchise laws apply when buying or selling a franchise in Quebec?

Quebec has no franchise-specific statute. The Canadian Franchise Association (CFA) says the core legal body is the Civil Code of Québec and court precedents. Three sets of rules are worth knowing before you sign or sell: the duty to inform and to act in good faith, the Code’s rules on contracts of adhesion, and the language rule in the Charter of the French language. This page covers Quebec only.

No franchise Act, but a duty to inform

The CFA states that Quebec is one of the only Canadian legal jurisdictions without a specific franchise legislation. It adds that a franchisor is not subject to specific, regulated franchise disclosure obligations under Quebec law, but is bound to disclose what the future franchisee needs to give informed consent. Article 1375 of the Civil Code of Québec requires the parties to conduct themselves in good faith both when the obligation arises and when it is performed or extinguished. Whether a particular omission breaches these duties is a question for a lawyer.

When the franchise agreement is a contract of adhesion

Article 1379 defines a contract of adhesion as one whose essential stipulations were imposed or drawn up by one of the parties, on that party’s behalf or upon its instructions, and were not negotiable. Whether a given franchise agreement is one is for a lawyer to say, and not every franchise agreement will be. Where it is, article 1435 makes an external clause null if, when the contract was formed, it was not expressly brought to the adhering party’s attention, unless the other party proves the adhering party otherwise knew of it. Article 1436 makes a clause that is illegible or incomprehensible to a reasonable person null if the adhering party suffers injury, unless the other party proves that an adequate explanation of the clause’s nature and scope was given. Article 1437 makes an abusive clause null, or the obligation arising from it reducible.

The language of the contract

Section 55 of the Charter of the French language provides that contracts pre-determined by one party, and the related documents, must be drawn up in French. The parties may be bound only by a version in another language if, after the French version has been remitted to the adhering party, that is their express wish. The section lists exceptions, including a contract of employment and a contract used in relations with persons outside Québec, so read the full text on LégisQuébec before relying on it. Ask which language version you are being asked to sign.

Doing your own checking

The CFA’s Quebec article says a potential franchisee has their own duty of due diligence: they should not only consider the information the franchisor provides, but also carry out their own research. For the steps of a purchase that apply across Canada, see How do I buy a franchise in Canada?.