What’s different in Saskatchewan?
While the Regulations are substantially similar to those in the other Disclosure Provinces, there are a few subtle but key differences that franchisors should be aware of. These differences may impact the content and scope of disclosure required in a franchisor’s disclosure document and are important for franchisors to understand to ensure compliance. Some of the more notable differences are highlighted below.
1. Risk warning statements
While substantively consistent, the prescribed risk warning statements in the Regulations contain minor differences in language compared to those in the other Disclosure Provinces. In particular, the Regulations omit the word “expert” from the statement advising prospective franchisees to seek legal and financial advice. As a result of these differences, franchisors will need to list Saskatchewan’s risk warning statements separately from those of the other Disclosure Provinces in their disclosure document.
2. Definitions
A notable difference is that the Regulations do not provide a definition for the terms “officer” or “earnings projection,” both of which are defined in British Columbia’s regulations. It is unclear why Saskatchewan has excluded these terms, considering all other Disclosure Provinces other than Ontario include them.
3. Exemption from application to the Act
Unlike most of the other Disclosure Provinces, the Regulations provide an exemption from the Act for organizations that “operate on a cooperative basis.” Specifically, the Regulations state that the following organizations are exempt from the application of the Act:
- Those operated on a cooperative basis by and for independent retailers that: (i) purchases or arranges for the purchase of, wholesale goods or services primarily for resale by the organization’s member retailers and (ii) does not grant representational rights to or exercise significant operational control over the organization’s member retailers
- A cooperative corporation as defined in subsection 136(2) of the Income Tax Act (Canada)
- A cooperative incorporated pursuant to the Canada Cooperatives Act, The Co-operatives Act, 1996 or The New Generation Co-operatives Act
The above exemption echoes the regulations to Ontario’s franchise legislation, which includes almost identical language.
4. Financial statements
The Regulations require that financial statements be prepared with the generally accepted accounting principles (GAAP) of the jurisdiction in which the franchise is based. This differs from the regulations in the other Disclosure Provinces, which predominantly state that financial statements must be prepared with the GAAP of the jurisdiction in which the franchisor is based.
By contrast, Ontario’s regulations do not specify a jurisdictional requirement, but instead state that financial statements must be prepared in accordance with the standards set out: (i) in the CPA Canada Handbook; (ii) by the Auditing Standards Board of the American Institute of Certified Public Accountants or the Public Company Accounting Oversight Board of the United States or (iii) by the International Auditing and Assurance Standards Board.
5. Delivery of disclosure document
In addition to the typical delivery methods prescribed in the other Disclosure Provinces, the Regulations specifically allow for the disclosure document to be delivered to prospective franchisees by registered mail. Consistent with a majority of the other Disclosure Provinces, the Regulations also permit electronic delivery, provided that: (i) the franchisee has the ability to view, store, retrieve and print the document; (ii) the franchisee is not required to access external documents (for example, through hyperlinks or downloads) and (iii) the franchisee provides written acknowledgement of receipt.
Notably, unlike Prince Edward Island’s regulations, the Regulations do not mandate that the disclosure document be delivered in a single, integrated file. The Regulations also omit New Brunswick’s unique requirement that, where a disclosure document consists of separate electronic files, the franchisor must provide an index listing the name and, where applicable, description of each file included in the disclosure package.
Alberta, on the other hand, is the exception, as the regulations do not prescribe any specific requirements regarding delivery methods.
6. Attorney for service
According to the Regulations, franchisors with a principal business address outside of Saskatchewan are required to appoint an attorney for service in the province. This aligns with the requirements under the regulations in Ontario and Manitoba, where the language in the applicable legislation suggests that an attorney for service in that province is mandatory. This differs from the regulations in the other Disclosure Provinces where an attorney for service in that province is only expressly required to be disclosed if the franchisor already has one.
7. Proximity
The Regulations diverge from British Columbia’s regulations by expressly addressing the issue of proximity. Specifically, the Regulations require that franchisors disclose their policies and practices regarding proximity between an existing franchise and any of the following:
- Another franchise of the franchisor or franchisor’s associate of the same type as the existing franchise
- Another distributor using the trademark, trade name, logo or advertising or other commercial symbol that is owned by or licensed to the franchisor or franchisor’s associate
- A franchise granted by the franchisor that distributes similar products or services under a different trademark, trade name or logo.
This aligns with the regulation requirements in all other Disclosure Provinces, except British Columbia and Alberta.
What’s next? Recommendations for franchisors
Although the Regulations have now been published, the Saskatchewan government has not yet announced when Act and accompanying Regulations will come into force. However, this is currently expected to occur in late 2025 or early 2026.
In the meantime, franchisors can take proactive steps to ensure a smooth transition once the legislation comes into effect. Below is a non-exhaustive list of key considerations to help franchisors begin aligning their disclosure practices and maintain compliance under the new regime:
1. Review and update disclosure document
To ensure compliance with the Act and Regulations, franchisors should conduct a thorough review of their current franchise disclosure document. Franchisors should pay particular attention to:
- Risk warning statements – update the template disclosure document to include Saskatchewan-specific language as required under the Regulations.
- Financial statements – ensure financial statements comply with the jurisdiction requirements outlined in the Regulations.
- Proximity policies and practices – disclose any policies or practices relating to proximity, if any, to the extent the current disclosure document does not already contemplate this.
2. Appoint an attorney for service in Saskatchewan
Franchisors with a principal business address and/or registered office outside of Saskatchewan who currently offer, or are planning to offer, franchises in the province, should arrange an attorney for service physically located in Saskatchewan, as required under the Regulations.
3. Engage legal counsel
Franchisors should consider consulting experienced franchise counsel to understand the impact of the Regulations on franchise businesses in Saskatchewan and ensure compliance with the new legislative requirements.
Our Franchise Practice Group continues to monitor the developments relating to the Act and the Regulations. MLT Aikins has extensive experience assisting franchisors navigate legislative requirements, including with respect to developing and updating forms of franchise agreements, disclosure documents, enforcement and dispute resolution processes in Western Canada and maintains a physical presence in the Province of Saskatchewan. Please contact one of our franchise lawyers to learn more.
Note: This article is of a general nature only and is not exhaustive of all possible legal rights or remedies. In addition, laws may change over time and should be interpreted only in the context of particular circumstances such that these materials are not intended to be relied upon or taken as legal advice or opinion. Readers should consult a legal professional for specific advice in any particular situation.
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