Renewal right (franchise)
A renewal right is a term of a franchise agreement that lets the franchisee extend the agreement beyond its term, on the conditions the agreement sets. Ontario’s regulation requires the disclosure document to describe renewal conditions, and the Act exempts some renewals from disclosure.
A resale buyer meets this term when the remaining term is short and the question is what comes after. The answer on whether renewal rights transfer to a new owner covers the transfer question. For the payment side, see renewal fee.
What Ontario’s rules say
O. Reg. 581/00, s. 6, requires the disclosure document to describe all restrictions or conditions in the franchise agreement related to the termination or renewal of the agreement. Under the Arthur Wishart Act, s. 5(7)(f), the disclosure rule in s. 5 does not apply to a renewal or extension 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. Section 2(1) applies the Act to a renewal or extension where the business is to be operated partly or wholly in Ontario. This entry covers Ontario; check the rules where you are.
What to check or ask
- Whether renewal is the franchisee’s option or needs the franchisor’s agreement
- What restrictions or conditions the agreement attaches to renewal, which Ontario’s regulation says the disclosure document must describe
- What notice must be given, and by when
Sources
This definition is checked against primary sources. Links were last confirmed on the dates shown.
- 01Government of OntarioGovernmentArthur Wishart Act (Franchise Disclosure), 2000, S.O. 2000, c. 3
- 02Government of OntarioGovernmentO. Reg. 581/00: GENERAL
Deavo is an advertising and listings platform, not a brokerage, law firm or valuation firm. This page is general information, not legal, tax, accounting or valuation advice, and rules differ by province. Confirm anything you rely on with a qualified professional before you act on it.