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CFA Disclosure Document Guide

In accordance with the mandatory disclosure policy of the Canadian Franchise Association adopted November 4, 1996 Revised April 2002.

To be updated when there is any material change affecting the franchise system, but at least annually and to be given to potential franchisees and existing franchisees on renewal.
Click here to download a printable PDF version of the CFA Disclosure Document Guide

1. CORPORATE NAME OF FRANCHISOR:
(State the name of the Franchisor).

2. BUSINESS EXPERIENCE OF THE FRANCHISOR:
Provide a brief history of the experience of the franchisor in the business being franchised, including the number of years in that business.

3. DIRECTORS, GENERAL PARTNERS AND OFFICERS:
The names of the directors, general partners officers of the franchisor who will have day to day management responsibilities relating to the franchise should be listed. A brief history of the experience of such directors, general partners, officers should also be set out. Further, include a statement that no conviction for an indictable offense under the Criminal Code of Canada involving franchises or other businesses or involving fraud or unfair or deceptive business practices, arising within the last ten (10) years, remains outstanding against any of such directors, general partners or officers, franchisor, or details of any such conviction.

4. FRANCHISE EXPERIENCE OF THE FRANCHISOR:

In this section, the franchisor should set out how long it has been awarding the franchises. The franchisor should also describe any previous franchise systems operated by it or any other franchise systems it currently operating under different trade-marks and trade names.

5. NATURE OF BUSINESS:
The nature of the franchisor's business and of the franchises being offered, should be described.

6. EXISTING FRANCHISEES:
A franchisor will normally include the following information in the form of a list with respect to its existing franchises:
(a) Names of existing franchisees;
(b) The address and telephone number at which the franchisee can be  contacted, and the name of the person to contact, where applicable;
(c) The addresses of the franchise locations of the franchisee.

Franchisors are strongly encouraged to include such information. If the
franchisor does not include the above information, then the franchisor should include a statement describing the opportunity which will be given to the prospective franchisee to have such information disclosed, or made available for review before making a decision to invest in the franchise. The franchisor should disclose, provide or make available review the above information a reasonable time (at least fourteen (14) days) prior to the execution of any binding unconditional document pursuant to which financial consideration is payable but not refundable

7. CORPORATE OUTLETS:
A list of existing franchisor-owned and affiliate-owned outlets should set out with their addresses.

8. REQUIRED INVESTMENT BY THE FRANCHISEE:
To the extent possible, the franchisor should set out the investment required of the franchisee broken down into the various categories front-end franchise fee, initial capital package, initial inventory and leasehold improvements. The franchisor should outline the terms of any available financing given or arranged by franchisor and the timing of all payments to the franchisor. The franchisor should state whether or not any deposit is required towards the award of the franchise, and if so, the terms of the deposit including amounts payable and refundability should be described.

9. THE FRANCHISE DOCUMENTS:
The salient provisions of the franchise should be summarized briefly, i.e. the length of the term and any renewals, amount of the initial fee and when payable, the amount of the royalty and when payable, the amount of the advertising contributions and when payable, any restrictions or investing in ongoing inventory, supplies and equipment, restrictions on the terms and conditions for renewal, assignment, whether and to what extent the franchisee receives an exclusive territory, etc.

The franchisor's current policy, if any, as to how close to an existing franchisee outlet the franchisor may establish another franchise or franchisor-owned outlet, other methods of distribution using the same trade-mark, and other franchises or franchisorowned outlets that distribute similar products or services under a different trade-mark, should be described. The franchisor's current policy, if any, as to whether the continuation of the franchisee's territory depends on the achievement of a certain sales volume, market penetration or other contingency and under what circumstances the franchisee's territory may be altered, should be described.
10. REBATES:
In this section, the franchisor should provide a general statement whether or not the franchisor or its affiliate receives rebates or other benefits resulting from the investing of goods or services by franchisees and if any such rebates or benefits are shared with franchisees directly or indirectly.

11. EARNINGS CLAIMS:
In this section, the franchisor should state whether or not it gives claim information to prospective franchisees. An earnings claim is oral or written information given by a franchisor or its agent from which a specific level or range of actual or potential sales, costs, income from franchises or franchisor-owned or affiliate-owned outlets may be readily ascertained. If the franchisor makes an earnings claim, it must have a reasonable basis in fact at the time it is made, including a description of the facts and assumptions used in its preparation.

12. OPPORTUNITY TO REVIEW DOCUMENTS AND INVESTIGATE THE FRANCHISE:
A statement should be made to the effect that the franchisee will be given not less than fourteen (14) days to investigate the franchise.

13. BANKRUPTCY AND INSOLVENCY:
A statement should be made to the effect that during the six (6) year periodimmediately preceding the date of this disclosure document neither the franchisor, nor any director, officer or general partner of the franchisor having day to day management responsibilities relating to the franchise has been adjudged or voluntarily became bankrupt or was reorganized due to insolvency or has taken the benefit of any statute for the relief of bankrupt or insolvent debtors or is subject to any pending bankruptcy, insolvency or reorganization proceeding, or the particulars of such bankruptcy, insolvency or reorganization should be summarized.

14. EXISTING LITIGATION:
The franchisor should describe, in reasonable detail, the existence ongoing material litigation with present or former franchisees involving misrepresentation or unfair or deceptive business practices or violating a law that regulates franchises or businesses.

15. OUTLET CLOSURES:
In this section, the franchisor should provide information about the total number of franchisor-owned, affiliate-owned and franchisee outlets have been closed in the two (2) year period prior to the date of the Disclosure Document, and information about the total number of which have been terminated or cancelled by the franchisor, not renewed by the franchisor, reacquired by the franchisor, or which have otherwise left the system during that time.

16. OTHER MATERIAL INFORMATION:
The franchisor should describe, in reasonable detail, any other information material to the franchise, the franchise relationship or about the franchisor.

17. CERTIFICATE OF DISCLOSURE:
The franchisor should include the following two paragraphs in this section.

The foregoing information is provided in accordance with the disclosure policy of the Canadian Franchise Association and is current to date. The Canadian Franchise Association has not checked the information and does not know if it is correct. The franchisor is a member in good standing of the Canadian Franchise Association and abides by its Code of Ethics, a copy of which is attached. The franchisee should examine the franchise investment carefully and independent legal, financial and business advice before making a decision to invest in the franchise.

The information provided in this disclosure document, or in any changes made in respect of this disclosure document, is full and accurate information considered by the franchisor to be material to the matters disclosed.