How do I buy a franchise in Canada?

If you want to know how to buy a franchise in Canada, start with one fact: you are joining a system, and the franchisor is a party to the deal. You may be buying a new franchise from the franchisor, or taking over an existing location from a current franchisee. In both cases the franchisor’s rules, fees and any approval rights in the franchise agreement can shape what you can do. Franchise law also changes by province: the Canadian Franchise Association notes important differences between the provinces with franchise laws, and some provinces have none. The steps below follow the order a buyer meets them, from finding out which law applies to deciding whether the system itself is sound.

Find out which province’s law applies

The Canadian Franchise Association says seven provinces currently have franchise legislation that sets out the obligations between a franchisor and its franchisees. Its province-by-province guide names Ontario, Alberta, British Columbia, Manitoba, New Brunswick, Prince Edward Island and Saskatchewan, and notes that Saskatchewan’s Franchise Disclosure Act was set to come into force on June 30, 2026. Quebec is not among the provinces it names. Ontario’s Arthur Wishart Act and British Columbia’s Franchises Act each apply where the franchised business is operated, or is to be operated, wholly or partly in that province, so ask a franchise lawyer which Act, if any, applies to your purchase. If your province has no franchise statute, the disclosure rules below do not apply to you, so have a lawyer review the agreement before you sign.

Insist on the disclosure document, and count the days

The Canadian Franchise Association explains that under these laws franchisors must give prospective franchisees a disclosure document and the franchise agreement within a set time frame, with specific material information in them. In Ontario, the Arthur Wishart Act says the document must reach you not less than 14 days before the earlier of two events: signing an agreement relating to the franchise, or paying consideration relating to it (the Act excludes certain deposits). British Columbia’s Franchises Act sets at least 14 days before the earlier of the same kinds of events. Both Acts also list grants the disclosure rule does not apply to (Ontario’s s.5(7), British Columbia’s s.5(8)), including some resales by an existing franchisee for its own account that are not effected by or through the franchisor, so if you are buying an existing unit, ask your lawyer whether you will receive a disclosure document at all. Do not let a deadline or a deposit request shorten that period. If the franchisor says a deposit is fully refundable or does not count, ask for that in writing and have your lawyer compare it with the wording of the Act, since only some deposits are excluded and only on conditions.

Know what late or missing disclosure can mean

Ontario’s Act gives a franchisee a right to rescind the franchise agreement, without penalty or obligation, no later than 60 days after receiving the disclosure document, if the franchisor failed to provide it, or a statement of material change, within the time required by section 5, or if the document’s contents did not meet the requirements of section 5. If the franchisor never provided the document, the right runs for two years after the agreement was made. These are Ontario’s rules. Another province’s Act may set different periods, so read the Act that governs your purchase rather than assuming the same terms apply.

Look at the system, not only the location

A disclosure document is a starting point. The Canadian Franchise Association advises doing proper and thorough due diligence with franchise professionals, including a franchise lawyer, an accountant and a banker, and speaking with other franchisees in the system, along with suppliers, landlords and customers. Use the disclosure document to ask questions of the franchisor, and ask to speak with former franchisees too. Ask how long the system has operated in Canada, what fees continue after opening, and what the franchisor controls: suppliers, pricing, territory, renewal and resale. If you are buying an existing unit, ask how the franchisor approves a new owner and what it charges for transfer. Ask also whether the franchisor must approve your finances, your experience and your training before you can open, and who pays for that training.

Use the franchise agreement’s own terms

The agreement is the contract you will live under, so read it for what you can and cannot do. Look at the term, renewal conditions, transfer rights, non-competition limits and what happens on termination. A separate Deavo page covers what to check in the franchise agreement in more detail. Financing is its own question: ask both the franchisor and the lender whether the system has an approved lender relationship, and see whether a franchise purchase can be financed.

• Ask a franchise lawyer which province’s Act applies and when the disclosure period starts
• Record the date you receive the disclosure document and keep the proof
• Do not sign or pay anything relating to the franchise until the required period has passed
• Speak with current and former franchisees before you commit
• Confirm the franchisor’s approval steps, transfer terms and ongoing fees in writing