CANADIAN FRANCHISE ASSOCIATION DISCLOSURE

CANADIAN FRANCHISE
ASSOCIATION
DISCLOSURE
DOCUMENT GUIDE
Inaccordancewiththemandatorydisclosurepolicy
oftheCanadianFranchiseAssociationadopted
November4,1996RevisedApril2002.
(Tobeupdatedwhenthereisanymaterialchange
affectingthefranchisesystem,butatleastannually
andtobegiventopotentialfranchiseesand
existingfranchiseesonrenewal.)
1. CORPORATE NAME OF FRANCHISOR:
(StatethenameoftheFranchisor).
2. BUSINESS EXPERIENCE OF THE
FRANCHISOR:
(Provideabriefhistoryoftheexperienceof
thefranchisorinthebusinessbeingfranchised,
includingthenumberofyearsinthatbusiness.)
3. DIRECTORS, GENERAL PARTNERS AND
OFFICERS:
(Thenamesofthedirectors,generalpartners
officersofthefranchisorwhowillhavedayto
daymanagementresponsibilitiesrelatingtothe
franchiseshouldbelisted.Abriefhistoryofthe
experienceofsuchdirectors,generalpartners,
officersshouldalsobesetout.Further,include
astatementthatnoconvictionforanindictable
offenseundertheCriminalCodeofCanada
involvingfranchisesorotherbusinessesor
involvingfraudorunfairordeceptivebusiness
practices,arisingwithinthelastten(10)years,
remainsoutstandingagainstanyofsuch
directors,generalpartnersorofficers,
franchisor,ordetailsofanysuchconviction).
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4. FRANCHISE EXPERIENCE OF THE
FRANCHISOR:
(Inthissection,thefranchisorshouldsetout
howlongithasbeenawardingthefranchises.
Thefranchisorshouldalsodescribeany
previousfranchisesystemsoperatedbyitor
anyotherfranchisesystemsitcurrently
operatingunderdifferenttrade-marksand
tradenames.)
5. NATURE OF BUSINESS:
(Thenatureofthefranchisor'sbusinessandof
thefranchisesbeingoffered,shouldbe
described.)
6. EXISTING FRANCHISEES:
(Afranchisorwillnormallyincludethefollowing
informationintheformofalistwithrespectto
itsexistingfranchises:
(a)namesofexistingfranchisees;
(b)theaddressandtelephonenumberatwhich
thefranchiseecanbecontacted,andthe
nameofthepersontocontact,where
applicable;and
(c)theaddressesofthefranchiselocationsof
thefranchisee.)
(Franchisorsarestronglyencouragedtoinclude
suchinformation.Ifthefranchisordoesnot
includetheaboveinformation,thenthe
franchisorshouldincludeastatement
describingtheopportunitywhichwillbegiven
totheprospectivefranchiseetohavesuch
informationdisclosed,ormadeavailablefor
reviewbeforemakingadecisiontoinvestin
thefranchise.)
(Thefranchisorshoulddisclose,provideor
makeavailablereviewtheaboveinformationa
reasonabletime(atleastfourteen(14)days)
priortotheexecutionofanybinding
unconditionaldocumentpursuanttowhich
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financialconsiderationispayablebutnot
refundable.)
7. CORPORATE OUTLETS:
(Alistofexistingfranchisor-ownedandaffiliateownedoutletsshouldsetoutwiththeir
addresses.)
8. REQUIRED INVESTMENT BY THE
FRANCHISEE:
(Totheextentpossible,thefranchisorshould
setouttheinvestmentrequiredofthe
franchiseebrokendownintothevarious
categoriesfront-endfranchisefee,initialcapital
package,initialinventoryandleasehold
improvements.Thefranchisorshouldoutline
thetermsofanyavailablefinancinggivenor
arrangedbyfranchisorandthetimingofall
paymentstothefranchisor.Thefranchisor
shouldstatewhetherornotanydepositis
requiredtowardstheawardofthefranchise,
andifso,thetermsofthedepositincluding
amountspayableandrefundabilityshouldbe
described.)
9. THE FRANCHISE DOCUMENTS:
(Thesalientprovisionsofthefranchiseshould
besummarizedbriefly,i.e.thelengthofthe
termandanyrenewals,amountoftheinitial
feeandwhenpayable,theamountofthe
royaltyandwhenpayable,theamountofthe
advertisingcontributionsandwhenpayable,
anyrestrictionsorinvestinginongoing
inventory,suppliesandequipment,restrictions
onthetermsandconditionsforrenewal,
assignment,whetherandtowhatextentthe
franchiseereceivesanexclusiveterritory,etc.)
(Thefranchisor'scurrentpolicy,ifany,astohow
closetoanexistingfranchiseeoutletthe
franchisormayestablishanotherfranchiseor
franchisor-ownedoutlet,othermethodsof
distributionusingthesametrade-mark,and
otherfranchisesorfranchisor-ownedoutlets
thatdistributesimilarproductsorservices
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underadifferenttrade-mark,shouldbe
described.)
(Thefranchisor'scurrentpolicy,ifany,asto
whetherthecontinuationofthefranchisee's
territorydependsontheachievementofa
certainsalesvolume,marketpenetrationor
othercontingencyandunderwhat
circumstancesthefranchisee'sterritorymaybe
altered,shouldbedescribed.)
10. REBATES:
(Inthissection,thefranchisorshouldprovidea
generalstatementwhetherornotthe
franchisororitsaffiliatereceivesrebatesor
otherbenefitsresultingfromtheinvestingof
goodsorservicesbyfranchiseesandifany
suchrebatesorbenefitsaresharedwith
franchiseesdirectlyorindirectly.)
11. EARNINGS CLAIMS:
(Inthissection,thefranchisorshouldstate
whetherornotitgivesclaiminformationto
prospectivefranchisees.Anearningsclaimis
oralorwritteninformationgivenbyafranchisor
oritsagentfromwhichaspecificlevelorrange
ofactualorpotentialsales,costs,incomefrom
franchisesorfranchisor-ownedoraffiliateownedoutletsmaybereadilyascertained.If
thefranchisormakesanearningsclaim,itmust
haveareasonablebasisinfactatthetimeitis
made,includingadescriptionofthefactsand
assumptionsusedinitspreparation.
12. OPPORTUNITY TO REVIEW DOCUMENTS
AND INVESTIGATE THE FRANCHISE:
(Astatementshouldbemadetotheeffectthat
thefranchiseewillbegivennotlessthan
fourteen(14)daystoinvestigatethefranchise.)
13. BANKRUPTCY AND INSOLVENCY:
(Astatementshouldbemadetotheeffectthat
duringthesix(6)yearperiodimmediately
precedingthedateofthisdisclosuredocument
neitherthefranchisor,noranydirector,officer
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orgeneralpartnerofthefranchisorhavingday
todaymanagementresponsibilitiesrelatingto
thefranchisehasbeenadjudgedorvoluntarily
becamebankruptorwasreorganizeddueto
insolvencyorhastakenthebenefitofany
statuteforthereliefofbankruptorinsolvent
debtorsorissubjecttoanypending
bankruptcy,insolvencyorreorganization
proceeding,ortheparticularsofsuch
bankruptcy,insolvencyorreorganizationshould
besummarized.)
14. EXISTING LITIGATION:
(Thefranchisorshoulddescribe,inreasonable
detail,theexistenceongoingmateriallitigation
withpresentorformerfranchiseesinvolving
misrepresentationorunfairordeceptive
businesspracticesorviolatingalawthat
regulatesfranchisesorbusinesses.)
15. OUTLET CLOSURES:
(Inthissection,thefranchisorshouldprovide
informationaboutthetotalnumberof
franchisor-owned,affiliate-ownedand
franchiseeoutletshavebeenclosedinthetwo
(2)yearperiodpriortothedateofthe
DisclosureDocument,andinformationabout
thetotalnumberofwhichhavebeen
terminatedorcancelledbythefranchisor,not
renewedbythefranchisor,reacquiredbythe
franchisor,orwhichhaveotherwiseleftthe
systemduringthattime.)
16. OTHER MATERIAL INFORMATION:
(Thefranchisorshoulddescribe,inreasonable
detail,anyotherinformationmaterialtothe
franchise,thefranchiserelationshiporabout
thefranchisor.)
17. CERTIFICATE OF DISCLOSURE:
(Thefranchisorshouldincludethefollowing
twoparagraphsinthissection.)
(Theforegoinginformationisprovidedin
accordancewiththedisclosurepolicyofthe
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CanadianFranchiseAssociationandiscurrent
todate.TheCanadianFranchiseAssociation
hasnotcheckedtheinformationanddoesnot
knowifitiscorrect.Thefranchisorisamember
ingoodstandingoftheCanadianFranchise
AssociationandabidesbyitsCodeofEthics,a
copyofwhichisattached.Thefranchisee
shouldexaminethefranchiseinvestment
carefullyandindependentlegal,financialand
businessadvicebeforemakingadecisionto
investinthefranchise.)
(Theinformationprovidedinthisdisclosure
document,orinanychangesmadeinrespect
ofthisdisclosuredocument,isfullandaccurate
informationconsideredbythefranchisortobe
materialtothemattersdisclosed.)
DATEDthisdayof,20.
EXECUTION:
(NAMEOFFRANCHISOR)
BY:
SIGNATURE
NAME
TITLE
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