Manitoba Franchise Legislation Comes Into Effect

The Canadian province of Manitoba’s new franchise laws, The Franchise Act and Franchises Regulation, came into effect on October 1, 2012. Manitoba now joins Ontario, Alberta, Prince Edward Island and New Brunswick among Canadian provinces requiring pre-franchise agreement disclosures. Details about Manitoba’s franchise law were discussed in our previous issue.

Changes to Ohio’s Business Opportunities Law

Changes to Ohio’s business opportunities law became effective September 28, 2012. Senate Bill No. 196 broadens the definition of “business opportunity plan” to include plans purchased with an initial payment up to $100,000, as opposed to the previous limit of $50,000. In addition, the bill amends various other provisions of the business opportunity law, including those relating to the cancellation of agreements, compliance with trade regulation rules, and disclosure requirements.

FTC Clarifies Franchise Rule’s “Exclusive Territory” Disclosure

On October 16, 2012, the Federal Trade Commission (the “FTC”) answered an additional “frequently asked question” regarding the 2007 amendments to its Franchise Rule. The frequently asked question is:

“May a franchisor state in Item 12 that it grants an ‘exclusive territory’ if it reserves the right to open franchised or company outlets in so-called ‘non-traditional venues’ like airports, arenas, hospitals, hotels, malls, military installations, national parks, schools, stadiums and theme parks?”

The FTC has responded that a franchise may not state in Item 12 that it grants “exclusive territory” if it reserves rights to open outlets selling the same goods or services under the same trademarks or service marks within a franchisee’s territory. The nature of the venue, according to the FTC, is not dispositive in this regard.