Opportunity Knocks: The Truth About Canada's Franchise Industry

Robert W. Sexty is a professor of commerce and business administration
at the Memorial University of Newfoundland and the author of Canadian
Business: Issues and Stakeholders.

A franchise is a licence or agreement from a company (the franchisor)
that allows an entrepreneur (the franchisee) to sell a particular
product or to use a particular process. In Canada, franchise operations
are extensive, with annual revenues estimated at $30 billion. Most
fast-food outlets operate as franchise systems, and the systems have
also been used for some time in hardware, gasoline, and automobile
retailing.

It is in regard to the legal arrangement between the franchisor and
franchisee that most problems arise. John Lorinc argues that franchise
agreements are not adequately regulated. Whereas legislation exists to
protect consumers, investors, or employees in their transactions with
business, only in Alberta is there legislation to protect franchisees in
their dealings with franchisors. Lorinc’s practical book provides
extensive information on franchising, along with examples of franchise
operations. It should be read by all entrepreneurs who are considering
the purchase of a franchise.