By Frank Zaid
There are many law-related issues to consider with regard to automotive service franchise systems in Canada, but they depend largely on the municipality and province in which a particular franchise is located.
Automotive service franchises are certainly abundant in most Canadian communities, reflecting the North American dependency on personal and business automotive travel. Specialized subcategories may include gas stations, automotive tool and equipment sales and servicing, transmission repair, auto glass installation, paint restoration, tune-ups, tire installation and retreading, interior cleaning and restoration, detailing, auto body and collision repair, oil and filter changes, security system installation, car washes, window tinting, rust prevention, parts distribution centres, battery replacement and brake repair, among others. And many franchise models involve a combination of some of the above.
Beside all of the legal requirements that pertain to disclosure documents, franchise agreements, real estate leases, employment and other matters common to most franchise systems, there are also many specific legal requirements that apply to automotive service franchises and, in some cases, to the particular type of service these franchises provide. They may be governed by provincial and/or municipal laws.
While it is not possible to cite every single such law throughout the country in this column, the following are some examples of the various types of laws that may apply and require significant attention by both franchisors and franchisees.
In the case of franchisors, their disclosure documents—in provinces that have established franchise legislation—must include details of permits, licences and certificates required for the operation of their franchise. This means the franchisors of automotive service businesses must ensure the complete accuracy of such information before it is provided to each franchisee, depending on where each franchise will be operated.
Similarly, franchisees need to be sure they understand the legal requirements governing the operation of their business and, accordingly, undertake whatever actions are necessary for compliance.