How a Franchise Agreement and a Franchise Disclosure Document differ
There are two documents that are of vital importance...
Canada's long awaited anti-spam legislation (CASL) comes into force as of July 1, 2014. CASL takes the approach of forbidding almost all unsolicited commercial electronic messages (CEMs) and generally speaking, requires intended recipients of CEMs to provide express consent to the receipt of those messages.
Once CASL takes effect, you will need express or implied consent before you (or your franchisees) can send a commercial electronic message (CEM}. While franchisors are well aware of pending impact of CASL and have been diligently ensuring that their organizations are ready, the bigger question that looms on the horizon is what are they doing to help their franchisees understand and comply with CASL’s requirements. Franchisors will typically be able to rely on implied consent under the B2B CASL provisions to communicate electronically with their franchisees. The bigger concern will be the B2C communications between franchisees and consumers. There is a lot of information on CASL available and while seemingly straightforward, the actual implementation for both franchisors and franchisees may prove to be more difficult. Ask yourself:
- Do your franchisees send CEMs?
- Do you know whether they are aware that they need to have consent to send CEMs?
- Do you know whether they understand the difference between implied or express consent to send CEMs?
- Do their CEMs satisfy the CASL content requirements?
- Do they know that the consents need to be recorded, in case they have to prove they had consent to send a CEM?
- Do you know if they have an unsubscribe mechanism for their CEMs?
Enforcement of CASL will be undertaken jointly by three regulators: Canadian Radio-Television Commission, Competition Bureau and Office of the Privacy Commissioner. These enforcing bodies will have authority to impose a wide variety of sanctions on individuals and businesses that contravene the CASL. While the regulators will probably be lenient initially, individuals may be fined up to $1,000,000 per violation and corporations may be fined up to $10,000,000 per violation. CASL also creates a private right of action which permits an individual to take civil action against anyone who violates the CASL that takes effect in 2017. Of course, it is probably not the risk of significant fines, but more likely the potential backlash in the social media, that you should be worried about, if your franchisees aren't prepared for CASL.
