Once a franchise agreement is entered into, the CCQ may also impose essential “implicit” obligations on franchisors that go beyond the written terms of the contract. Quebec courts have applied the CCQ to recognize broad tacit obligations and read them into franchise agreements, including the disclosure requirement; The obligation to cooperate and co-operation; The duty of loyalty The duty to respect the reasonable expectations of the other party; and the obligation to treat the parties equally in similar situations and, among other things, to properly exercise their rights. Quebec courts have applied these implicit obligations to punish the inappropriate behaviour of franchisors, even though the franchise agreement does not explicitly prohibit specific behaviour. As a general rule, what are the royalties collected under a franchise agreement? Commercial leasing contracts generally have an initial term of 10 years, often with one or more successive options, to extend or extend the initial term for a period of five to ten years. However, duration is a business issue negotiated by the parties to achieve their specific business objectives. Franchisors and franchisees will often attempt to have the term of the lease and all the extensions/renewals available are the duration of the franchise agreement. Franchise statutes in each of the regulated provinces provide that franchised documents are governed by the laws of the jurisdiction in which the franchise operates, and any attempt by the parties to enter into a contract based on existing franchise laws is invalid. Outside regulated provinces where there is no provincial franchise law, parties are free to choose the existing right of their choice. 17.2 If a signed/executed franchise contract is electronically registered (either with electronic signatures or with a “wet ink” version that has been scanned and recorded as an electronic file), can the paper version of the contract be destroyed? (iii) The right to a franchisee association: any franchisee has the legal right to partner with other franchisees for the purpose of creating or joining a franchise association, and the franchisor is expressly prohibited from intervening or restricting such efforts or activities in any way. Under a master franchise agreement, a franchisor grants a franchisee (the “franchise master”) the right to operate the franchise system in a specific geographic area. The franchisee essentially acts as a “mini-franchiser” for its territory and will enter into sub-franchise agreements with franchisees (or “under-franchises”).
While master-franchise can be an exciting opportunity to introduce a concept to a new market, investors should be aware of the potential pitfalls: these are specific to the franchise agreement concerned and are subject to any applicable legal fair trade obligation and common law obligation. Duration of agreement: Then, make sure that the duration of the franchise agreement is clearly defined.