Franchisor

The Canadian Franchise Association describes the franchisor as the owner who gives a licence to a third party to use its operating system, name and trademarked materials. In a resale, the franchisor is not the seller, but the franchise agreement may give it a say in who the next franchisee is. Who has to approve a franchise resale? takes that up.

What the statutes add

Ontario’s and Alberta’s Acts attach duties to the franchisor, such as providing the disclosure document within the time required, and they speak of the franchisor’s associate as well. Ontario’s definition of franchise agreement covers an agreement with a franchisor or its associate. Alberta’s Act defines an associate in section 1(2), so the party who signs the agreement may not be the only one the Act reaches. Each province defines these terms in its own Act.

What to check

• The legal name of the franchisor entity and who its associates are
• Whether the franchisor is itself a subfranchisor under a master franchise
• What the agreement says about the franchisor approving a transfer

The other party is the franchisee.