The Franchises Act protects persons buying franchises in New Brunswick by ensuring franchise information is provided to them before they enter into a franchise agreement, and by providing avenues of recourse if they encounter problems.
The Act requires fairness in the legal relationship between franchisors and franchisees. It contains five key elements:
- a duty of fair dealing;
- the franchisees' right to form an association;
- the franchisor's duty of disclosure;
- a mediation procedure; and
- protection from being forced to litigate outside New Brunswick.
The company granting the franchise is required to provide a disclosure document with prescribed information that will enable the purchaser to make an informed decision before they buy in.