Disclosure Document

A disclosure document must be provided by the franchisor 14 days before you sign any agreement related to his franchise. If you plan to give him any sort of payment, he must also provide this document 14 prior to receiving it, whichever is first. This is enforced by law in the provinces of Alberta, Ontario and PEI. If you researching a franchise outside of these provinces, but are operating in one of these provinces, you can request a copy of the franchisor’s disclosure document that is required in these provinces. The document needs to contain all franchise contracts to be signed, financial information of the franchisor, and all other documents in accordance with regulation. The document needs to be signed by a minimum of two officers or directors, stating that the document is completely true and omits nothing of importance. As a franchisee, use the disclosure document to evaluate the merits of a given franchise. However, all documents need to be reviewed by your lawyer, accountant and other franchisees if possible. Franchise consultant are also very helpful in this regard.