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December 27, 2006
For immediate release

Franchise Laws in Force in Prince Edward Island

Office of the Attorney General

New laws governing the franchise industry in Prince Edward Island will be in place as of January 1, 2007, Attorney General Mildred Dover announced today. The current PEI Franchises Act establishes a duty of fair dealing between parties to franchise agreements and guarantees rights of association among franchise outlet operators. Beginning in the new year, amendments to the law will also require that new franchisees be provided with a comprehensive disclosure document before they sign a franchise agreement.

Under the new laws, once a prospective franchisee is provided with the required information, they have 14 days to consider whether to enter into the franchise agreement. If a prospective franchisee is not provided with the information required under the Franchises Act, but signs an agreement anyway, they have rights to rescind or cancel the agreement. If the disclosure documents provided by a franchisor include misrepresentations, the franchise operator can sue for damages.

“These laws provide a framework for open and fair dealing between business partners operating in the franchise system,” said Honourable Mildred Dover. “Business people who are considering opening a franchise outlet in Prince Edward Island will be given the information they need to make an informed business decision before they commit their time and resources to opening an outlet.”

As of January 1, 2007, all new franchise agreements relating to PEI franchises will be subject to the disclosure requirements of the Franchises Act and regulations. Renewal franchise agreements will not be subject to the new requirements unless there are material changes to the franchise operations.

The Statutes and Regulations of Prince Edward Island can be found online at:

Media Contact: Connie McNeill
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