Waiver of statutory franchise rights

A release, an acknowledgement or a “no reliance” statement in closing documents can raise the question; whether a clause is a waiver under the Act is one for a lawyer. Ontario’s Arthur Wishart Act, s. 11, says any purported waiver or release by a franchisee of a right given under the Act, or of an obligation or requirement imposed on a franchisor or its associate by or under the Act, is void. Alberta’s s. 18 is framed around a right or requirement under the Act or the regulations.

Differences by province

British Columbia’s s. 13(1) and Manitoba’s s. 11 also reach a prospective franchisee, and New Brunswick’s s. 12 does the same. British Columbia’s s. 13(2) adds an exception: s. 13(1) does not apply to a waiver or release made in accordance with a settlement of an action, claim or dispute. That is why the context of a release matters, not just its wording.

What to ask

• Which Act applies and whether its waiver section covers prospective franchisees
• Whether the release forms part of a settlement of a claim
• What the document says the buyer did not rely on, and whether that matches the disclosure
• Whether a lawyer has read it before signing

A related clause is the franchise governing law and forum clause. See also what to check in the franchise agreement.