Author: Andrew Brunton

Andrew provides business owners, business managers and individuals with business law, franchise law and real estate law advice.  Andrew advises residential and commercial real estate owners on the purchase, sale…

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Our prior articles regarding franchises have focused mainly on franchisors. However, we often advise potential franchisees.
The following article is part of a series of articles that document some key considerations about franchising.
So you’ve incorporated a company in which you and your fellow founders own shares. Business is booming and things are going great, but they may not stay that way forever.
For those looking to get into business, starting from scratch is not always the best option.

I am often asked “can I sell franchises?”.  The short answer is “yes”.  However, a potential franchisor needs to consider what is involved in franchising. 

Although there are commonalities, no two commercial financings are the same.  Typically, your legal counsel is not involved until after you have signed a letter of offer or credit agreement with your bank setting out the business terms of the financing.  That said, we are happy to help at this stage with advice regarding the security you are being asked to provide.  Where the bank is taking security for their loan, they usually retain legal counsel once the credit agreement is signed.

We often get asked if oral contracts are enforceable. Generally, they are. The problem is proving the existence of the oral contract should you ever have to do so. We always recommend reducing your agreement to writing, but a court will enforce an oral agreement if you can provide enough evidence of the agreement. In addition to making it easier to enforce your agreement, putting an agreement in writing usually results in the parties clarifying the terms of their agreement and may avoid misunderstandings.

In British Columbia, the Securities Act and the rules adopted by the British Columbia Securities Commission (“BCSC”) impose a number of obligations on corporations.  One of the main objectives of the Securities Act and the BCSC is to protect investors when they invest in “securities”, such as shares of a corporation.  

In the article entitled “Does the Securities Act Apply to My Corporation?  The Answer Might Surprise You”, we noted that when a corporation issues shares it has to provide an investor with a “prospectus” unless the corporation can rely on an exemption from this requirement.

As business lawyers, we are often asked to clarify the role of the board of directors of a corporation.  The general role of directors is to supervise the management of the business and affairs of the corporation. The functions of the directors include:

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Pushor Mitchell’s “Legal Alert Blog” evolved from our long-running “Legal Alert” client newsletter. Here, we share news our clients need to know, such as changes to the law, major case decisions, industry trends, and other legal issues that affect people and organizations in B.C. Occasionally, we also share firm news and announcements, as well as stories about our involvement with community groups throughout the Okanagan.

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