On Tuesday the Government of the Province of Manitoba released its draft regulations under the Franchises Act for consultation. Comments are due by Thursday, December 15^th.

The draft regulations and consultation paper are here.

Generally they follow, in one aspect or another, the regulations already in effect in other provinces.

However, Manitoba did manage to find some new items that will affect franchisors.

The more important thing in my view is the requirement for information regarding the differences between Generally Accepted Accounting Principles in the franchisor’s home jurisdiction and those in Canada. (Section 7(2)(b)). No other province has this specific requirement.

This will mean that a foreign franchisor that wishes to use financial statements from its home jurisdiction will be required to have an accountant (presumably one who is familiar with the requirements of the GAAP, and accredited in, in both Canada and their home jurisdiction – not always easy to find) prepare a list of the differences between the two jurisdictions and how each difference would affect the financial statements.

I would be interested in hearing from franchisors on what they expect that might cost, and whether it might discourage them from offering a franchise in Manitoba. Manitoba is Canada’s 5^th largest province (out of ten) with 1.2 million people. However it is not a rich province and its gross GDP is the 6^th largest in Canada.

The other new item is an ability to provide disclosure documents in parts (Section 4). I am not sure that this will prove very popular with franchisors who are already providing disclosure all in one document for the other provinces. This provision is also in the Act (Section 5(3)).