Substantial compliance (franchise disclosure)

A franchisor defending a flawed disclosure document, or a buyer arguing the document fell short, meets this term. It asks whether a defect matters or is merely technical. Each Act below also gives a franchisee a right to rescind in stated cases (British Columbia s. 6, Manitoba s. 6), so the saving rule can matter to that claim; how it applies to a given flaw is a legal question.

British Columbia

Section 9 of the Franchises Act says a disclosure document or a statement of material change complies with s. 5 despite a defect in form, a technical irregularity or an error, if two things are true. The defect, irregularity or error does not affect the substance of the document, and the document is substantially in compliance with the Act.

Manitoba

Section 5(10) of The Franchises Act says a franchisor complies with s. 5 if its disclosure document substantially complies with the Act, and even if the document contains a technical irregularity or mistake not affecting its substance.

What to ask

• What exactly is wrong, and whether it touches the substance, such as a fee, a financial statement or a required item
• Whether a statement of material change is affected as well

This entry covers British Columbia and Manitoba only; check the rules where you are. See what a franchisor must disclose and the rescission right.