Q&A

Question: How long is the “cooling off” period?

There are in effect 2 ‘cooling off’ periods when it comes to franchising. The first cooling off period occurs before the Franchise Agreement is entered into, the second occurs afterwards, once the Franchise Agreement has been signed by both parties.

Before a Franchise Agreement is entered into, a Franchisee must be given 14 days to read, understand and seek advice from a lawyer on the Franchise Agreement, before it can be signed. After the Franchise Agreement is entered into, the Franchisee then has another 7 days during which it can terminate the Franchise Agreement. In each case, the Franchisor is able to retain any reasonable expenses related it has already incurred in relation to the Franchisee before the Franchise Agreement was terminated.