Franchisee Evaluation and Application Form | Canada

Bad things can happen when a franchisee is unable to meet its obligations. Be sure to have all your franchisees sign this Guarantee and Indemnification.

A franchisee may, for any number of reasons, find itself unable to fulfill its obligations under the Franchise Agreement. To protect your business against franchisee default, it is essential to have your franchisees sign a Guarantee and Indemnification Agreement.

Legal Basis and Structure

This document is a Canadian legal form created specifically for franchise relationships. Under the terms of the agreement, a principal of the franchisee company personally guarantees the fulfillment of all obligations and the payment of any amounts owed to the franchisor under the Franchise Agreement.

Indemnification Provisions

The franchisee company agrees to indemnify the franchisor against any losses or claims that arise as a result of the franchisee's default or inability to perform.

Acknowledgment and Covenants

By signing the Guarantee and Indemnification, the principal of the franchisee acknowledges and agrees to be bound personally by the covenants outlined in the Franchise Agreement.

Benefits of Having the Guarantee in Place

Requiring all franchisees to execute this Guarantee and Indemnification provides legal recourse if a franchisee fails to meet its obligations or is unable to continue operating its business.

Access and Governing Law

The Guarantee and Indemnification form is available for immediate download following purchase. The agreement is governed by the laws of Canada.

Canadian franchise laws require franchisors to provide potential franchisees with this Franchise Disclosure Document.

• The Disclosure Document discloses all relevant information about the franchisor and the franchise business as required by franchise laws and regulations for the Provinces of Ontario, Alberta, British Columbia, Manitoba, New Brunswick, and Prince Edward Island, including:
  • the franchisor's corporate structure and history,
  • the business experience of the principals of the franchisor,
  • any current or potential litigation involving the franchisor,
  • initial franchise fees and other fees to be paid by a franchisee,
  • financing, working capital, and estimates of annual operating costs,
  • restrictions on sources of products and services, and restrictions on what the franchisee may sell,
  • assistance and training programs offered by the franchisor,
  • government licenses, registrations and authorizations,
  • provisions for renewal, transfer and termination of the franchise,
  • financial statements and information,
  • forms and addenda to meet province-specific requirements.
• The form is available in MS Word format.
• Intended for use only in Canada.

Write a Franchise Agreement for a franchise business in Canada using this comprehensive template.

• This is a standard form of franchise agreement which is completely customizable and can be used across Canada in all provinces except for Quebec.
• The document contains clauses covering the initial term and renewal terms, initial franchise fee, and continuing fees to be paid by the franchisee.
• The franchisor is responsible for providing the franchisee with training, ongoing support and access to its purchasing programs.
• The franchisee is responsible for being open for business and operating the franchise in accordance with the franchisor's operations manual and system standards.
• The franchisee must comply with confidentiality and non-competition provisions both during and after the term of the agreement.
• The franchisee is obligated to participate in the franchisor's advertising and marketing programs.
• The template contains provisions for arbitration procedures.
• Available in MS Word format.
• Intended to be used only within Canada.

Canadian franchisors, create a Restrictive Covenant and Confidentiality Undertaking for your franchisees with this template.

• Under this Undertaking, new franchisees signing up to your program agree to be bound by the restrictive covenant and confidentiality provisions of the Area Development Agreement in effect in their territory.
• This downloadable form is available in MS Word format and is easy to customize to fit your circumstances.
• Intended for use only in Canada.

Canadian franchisors can appoint a master franchisee who will sell franchises for them under the terms of this Master Franchise Agreement.

• The master franchisee will operate on a non-exclusive basis within a specified territory.
• The master franchisee has the right to use the franchisor's logos and marks, to establish and operate franchise centres within the territory and to license other franchisees to operate those franchise centres.
• A franchise fee will be paid for each franchise sold, plus a continuing royalty.
• The franchisor will provide an initial training program.
• The master franchisee is responsible for ensuring each franchisee operates in accordance with the system developed by the franchisor.
• The agreement contains provisions concerning design and construction of franchise centres.
• Available in MS Word format, fully editable to fit your circumstances.
• Intended to be used only in Canada.