Governing law and forum clause (franchise)

A franchisor based elsewhere may write its home law or courts into the agreement. The general idea is in the governing law clause entry. Franchise Acts limit it. Ontario’s Arthur Wishart Act, s. 10, voids a provision purporting to restrict the application of Ontario law, or to restrict jurisdiction or venue to a forum outside Ontario, with respect to a claim otherwise enforceable under the Act in Ontario.

Other provinces

Alberta’s s. 17, Manitoba’s s. 10 and New Brunswick’s s. 11 use the same shape for their own provinces. British Columbia’s s. 12(1) voids the restriction for claims arising under a franchise agreement to which its Act applies, and s. 12(2) says this applies to a provision sending disputes to arbitration. Manitoba’s s. 10(2) and British Columbia’s s. 12(3) exclude a claim whose action began before the section came into force, and New Brunswick’s s. 11(2) one whose action began before February 1, 2011. Each rule is limited to the claims its section names, so the clause may still operate on other disputes. This entry covers Ontario, British Columbia, Alberta, Manitoba and New Brunswick only; check the rules in the province where the business is.

What to check

• Which law and forum the agreement names, and whether it includes arbitration
• Which province the franchised location is in
• Whether the dispute is a claim under that province’s Act or a different one
• How the clause sits with any waiver wording

The franchise agreement answer lists other clauses to read.