The Canadian Franchise Association (CFA) is dedicated to encouraging and promoting excellence in franchising in Canada. Each member of the Association, by becoming a member and upon renewing its membership from time to time, agrees to abide by this Code of Ethics and to further the Associations goals in encouraging and promoting excellence in franchising in Canada. Each member of the Association agrees to comply with the spirit of this Code of Ethics in its general course of conduct and in carrying out its general policies, standards, practices. The following are considered by the Association to be important elements of ethical franchising practices:
- Franchise system and a franchise support services member should fully comply with Federal and Provincial laws, and with the policies of the Canadian Franchise Association.
- A franchisor should provide prospective franchisees with full and accurate written disclosure of all material facts and information pertaining to the matters required to be disclosed in advance to prospective franchisees about the franchise system a reasonable time [at least fourteen (14) days] prior to the franchisee executing any binding agreement relating to the award of the franchise.
- All matters material to the franchise relationship should be contained in one or more written agreements, which should clearly set forth the terms of the relationship and the respective rights and obligations of the parties.
- A franchisor should select and accept only those franchisees who, upon reasonable investigation, appear to possess the basic skills, education, personal qualities and financial resources adequate to perform and fulfil the needs and requirements of the franchise. Franchise systems and franchise support services members of the Association should not discriminate based on race, colour, religion, national origin, disability, age, gender or any other factors prohibited by law.
- A franchisor should provide reasonable guidance, training, support and supervision over the business activities of franchisees for the purposes of safeguarding the public interest and the ethical image of franchising, and of maintaining the integrity of the franchise system for the benefit of all parties having an interest in it.
- Fairness should characterize all dealings between a franchisor and its franchisees. Where reasonably appropriate under the circumstances, a franchisor should give notice to its franchisees of any contractual default and grant the franchisee reasonable opportunity to remedy the default.
- A franchisor and its franchisees should make reasonable efforts to resolve complaints, grievances and disputes with each other through fair and reasonable direct communication, and where reasonably appropriate under the circumstances, mediation or other alternative dispute resolution mechanisms.
- A franchisor and a franchise support services member should encourage prospective franchisees to seek legal, financial and business advice prior to signing the franchise agreement.
- A franchisor should encourage prospective franchisees to contact existing franchisees to gain a better understanding of the requirements and benefits of the franchise.
- A franchisor should encourage open dialogue with franchisees through franchise advisory councils and other communication mechanisms. A franchisor should not prohibit a franchisee from forming, joining or participating in any franchisee association, or penalize a franchisee who does so.
- A franchise support services member in providing products or services to a franchisor or franchisee should encourage the franchises to comply with the spirit of this Code of Ethics. A franchise support services member should not offer or provide products or services if legislative or professional qualification is required to do so unless the franchise support services member has such qualification.
Revised March 19, 2007
