VICTORIA – The B.C. New Democrats are stepping up for small business owners who can be vulnerable to their franchisors by proposing legislation that would level the playing field and provide certainty for investors.
“Small businesses create thousands of jobs in B.C. and we need to support them. Many of those small businesses are franchises, and they can often be at the mercy of large franchisors,” says New Democrat finance spokesperson Carole James. “Small business owners invest their hard earned money into their companies, so we need to ensure that legislation is in place to protect their investments.”
James and New Democrat MLAs Adrian Dix and Jane Shin met with franchisees at the B.C. legislature on Wednesday before introducing the Franchise Act in the house.
The regulatory void that currently exists means franchisees can have major obligations to the franchisor but few rights to fight back if they are being treated unfairly. Franchisees face most of the risk in the business partnership, but may not have the means for the kind of investigation needed to determine whether their investment is a good one.
“In other provinces franchisors operate successfully with Franchise Act legislation in place that ensures disclosure. Doing so in BC would not add to the burden for most good players in the industry,” said Dix, New Democrat MLA for Vancouver-Kingsway. “What this bill does is ensure that small business know what they are buying when they enter into a franchise agreement.”
There are an estimated 10,000 franchise outlets with $14 billion in sales and 180,000 employees.
“British Columbia has more than its fair share of franchises, yet no legislation that specifically protects them,” said Shin, the New Democrat MLA for Burnaby-Lougheed. “After speaking with franchisees in communities province wide, it was clear that it’s time to act on behalf of small business owners.”
Franchise legislation is in place in five provinces: Alberta, Prince Edward Island, Ontario, New Brunswick and Manitoba.
A Franchise Act for British Columbia