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Missed in Translation: Bringing Your U.S. Franchise Agreement to Canada

By Mary Paterson and Christine Jackson
November 02, 2014

With a diversified consumer base, a stable economy, and a well-established legal system, Canada is a receptive jurisdiction for expanding U.S. franchise systems, as long as the U.S. franchisor plays by Canada's rules.

Several Canadian provinces have franchise-specific legislation imposing obligations not usually found in the U.S.; other provinces rely on the common law or the civil law to regulate the franchisee-franchisor relationship. Although Quebec is the only province in Canada that requires a franchisor to translate the language (i.e., English to French) of its franchise agreements and related documents, in all provinces a U.S. franchisor must translate the legal terms of its franchise agreements and related documents into the Canadian legal context.

This article highlights five key concepts that are often missed or misunderstood when a U.S. franchisor translates its U.S. agreements into the Canadian legal framework. As you will see, these concepts can trap U.S. franchisors in part because they do not have simple solutions. That said, asking the right questions is the first step to managing the risks, and therefore reaping the rewards, of expanding a franchise system in Canada.

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