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Starting a franchise business

Last updated on January 21, 2026

Find resources and information for starting a franchise business. Franchised businesses are a significant contributor to B.C.'s economy. They include restaurants, hotels, car dealerships, retail stores and more.

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How franchises work

A franchise is a business that can sell goods or services under a franchisor's business system or trade name. In return, the franchisor may receive fees and royalties from the franchisee.

The franchisor provides the franchisee with the operating system, brand name and support. To be consistent, the franchisee operates the business in the way the franchisor wants.

Franchisee rights

The Franchises Act governs franchised businesses in B.C. and provides important legal protections for B.C.-based franchisees who operate a franchise.

The Act:

  • Requires that contracts include pre-sale disclosure documents
  • Provides legal options to help franchisees resolve disputes
  • Requires disputes to be heard in B.C.

Example of a franchise

Olivia wants to open a fast-food restaurant under the popular brand, ABC Fast Food Inc. Most people already know about ABC Fast Food Inc. and enjoy their food products. 

ABC Fast Food Inc. provides Olivia with access to their brand name, operating system and support. In return, Olivia pays fees and royalties to ABC Fast Food Inc.

Olivia is the franchisee. ABC Fast Food Inc. is the franchisor. Olivia's restaurant is a franchise business.

Research the franchise

When considering whether to buy a franchise, make sure you understand exactly what you will be getting. Research is your first step in becoming a successful franchisee.

Learn what you should consider, questions to ask and resources that can help you along this path.

Talk to the franchisor 

Talk to the franchisor and ask them questions to help understand the franchise. Consider reviewing the answers with a lawyer experienced in franchise law to ensure you fully understand.

Sample questions

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Franchisor background

  • How many years has the franchisor been operating?
  • How many franchisees does the franchisor have?
  • What are the franchisor’s plans for future development?
 

Financial commitments

  • How much is the initial franchise fee?
  • How much are royalty fees?
  • Are royalty fees dependent on sales, and if so, net or gross sales?
  • How much are the advertising contributions?
    • Can the franchisor use them only for advertising, and are the franchisees entitled to an accounting?
 

Support and training

  • What sort of training is provided to the franchisee and for how long?
  • Does the franchisor offer financing options?
 

Operational costs and responsibilities

  • Who is responsible for constructing or developing the franchise premises?
  • Who pays for cost overruns?
  • Does the franchisor keep rebates on supplies, or are they passed down to the franchisees?

Review the legal documents

Disclosure Documents, Franchise Agreements and associated lease agreements are obtained from the franchisor. Make sure you understand your obligations.

The Disclosure Document

The Disclosure Document contains all the required information that the franchisor must disclose about:

  • The franchise
  • Their business background
  • Anything that would significantly affect the prospective franchisee’s decision to enter into the franchise

Review the Franchises Regulation for detailed requirements of what must be included in the Disclosure Document.

Franchise agreement

The Disclosure Document contains the Franchise Agreement. This is the contract that the franchisor and the franchisee enter that governs their relationship for the duration of the franchise.

You are only buying what is stated in the Franchise Agreement, so read the document thoroughly. Ensure you understand:

  • How long the franchise is granted
  • Are you granted exclusive territory? If so, what is it?
  • Do you have renewal rights? If so, how long, and how are they triggered?
  • Does the franchisor promise training? Who pays the costs?

Talk to other franchisees

The Disclosure Document should contain contact information for all current and former franchisees of the system.

Talk to other franchisees and ask them questions to help you understand what it is like to own the franchise including:

  • How long have they owned the franchise?
  • What do they think of the franchise?
  • How much time per week do they put into the business?
  • Would they purchase the same franchise again?
  • Are they looking to sell and if so, why?

Get advice on the agreement

Before you sign any contracts or agreements:

  • Seek advice from a finance expert
  • Review all documents with a lawyer (preferably with expertise in franchising)

Once you sign the franchise agreement or pay money to the franchisor, you become a franchisee. Along with this comes responsibilities and things to consider as a business owner.

Some business planning considerations include:

  • Identify any skills or training you may need before buying the franchise
  • Review the steps to starting a business
  • Invest your time, particularly during the start-up phase, by working hands-on in the business to fully understand the operational side

 Get help

Find business support to help you start, buy, manage or grow a franchise.

Get help with your franchise  â€‹â€‹

The Province is providing this resource solely for purposes of general guidance with respect to the subject matter involved.  As such, this resource is not intended as a substitute for professional advice. 

You should consult with a qualified professional to validate the accuracy and relevancy to your business before making any decisions based on this resource.