Renewal or extension exemption (no material change)

A franchisee meets this exemption when the term is ending and the franchisor offers a renewal. Ontario’s Arthur Wishart Act, s. 5(7)(f), takes a renewal or extension outside the disclosure rule in s. 5 where there has been no interruption in the operation of the business and no material change since the agreement, or its latest renewal or extension, was entered into. See what to check about renewal terms.

How the provinces word it

British Columbia’s Franchises Act, s. 5(8)(f), sets the same two conditions. Alberta’s Franchises Act, s. 5(1)(d), exempts “a renewal or extension of an existing franchise agreement” and the paragraph states no further conditions. This entry covers Ontario, British Columbia and Alberta only; check the rules where the business is.

What to ask

• Whether the business ran without interruption up to the renewal
• What has changed in the franchisor or the system since the last agreement, and whether it is a material change
• Who must prove the exemption: Ontario’s s. 12 puts the burden of proving an exemption on the person claiming it