Prince Edward Island Enacts Franchise Legislation

On June 7, 2005, the Legislative Assembly of the Province of Prince Edward Island gave royal assent to Bill 43, the Franchises Act. While Bill 43 has received royal assent, it has not yet been put into effect as the Regulations to the Franchises Act have not been finalized.

Prince Edward Island’s Franchises Act is very similar to franchise legislation currently in force in the Provinces of Alberta and Ontario. By way of summary, Prince Edward Island’s Franchises Act contains the following key provisions:

1. a franchisor is required to provide a prospective franchisee in Prince Edward Island with a disclosure document not less than 14 days before the signing of a Franchise Agreement or the payment of money by the prospective franchisee to the franchisor. The disclosure document must disclose all material facts, including the franchisor’s financial statements, copies of all proposed agreements to be signed by the franchisee and other information that is detailed in Regulations that