4. When is a franchisor required to provide a disclosure document (and to whom)?

A franchisor must give a copy of the disclosure document, together with copies of the Franchising Code and the franchise agreement (in the form in which it is to be executed), to:

  •  a prospective franchisee at least 14 days before they:
    •  enter into a franchise agreement (or an agreement to enter into a franchise agreement) or
    •  make a non-refundable payment to the franchisor in connection with the franchise agreement.
  •  a franchisee at least 14 days before the renewal or extension of the franchise agreement.

Under the code, a master franchisee (sometimes called a sub-franchisor) has the same disclosure obligations as the franchisor. This means that if a master franchisee is proposing to grant a sub-franchise to a prospective sub-franchisee, the franchisor and master franchisee must either give:

  • two separate disclosure documents or
  • a joint disclosure document (which details the respective obligations of the franchisor and the master franchisee in the operation of the franchise)

to the prospective sub-franchisee.

A franchisor must also give to a franchisee a current disclosure document within 14 days after a written request by the franchisee. This request can only be made once in 12 months.