| Many small business owners contend that there is a shortage of low-skilled labour in many regions of the country, and these entrepreneurs must rely on the TFWP to staff their operations when no Canadian can be found. With this moratorium, many employers feel that they are left without any recourse when attempting to staff their businesses, and the restaurant industry has been singled out by both the federal government and the media to be made a national example of. For those restaurants who operate by way of a franchise model, the crisis management options are neither easy nor obvious. Certainly, from a strictly legal perspective, each franchise agreement should provide that the franchisor has the right to terminate the agreement and the option to purchase the business should the franchisee conduct itself in a manner that is offside applicable laws or which brings harm to the brand’s goodwill. However, enforcing those provisions is not a decision that is arrived at lightly and it must be weighed against the reputational risk that the resulting media attention may garner, in light of the current, controversial events. Franchisors are generally well-advised to stay out of the employment relationships between franchisees and their employees for a number of reasons. Now might be a good time, though, for franchisors to conduct a form of audit of its franchisees’ hiring practices so that any issues can be caught and managed before their brand name appears in headlines across Canada.See also:
About the authors Chad Finkelstein is a franchise lawyer at Dale & Lessmann LLP in Toronto and can be reached at [email protected] or (416) 369-7883. Kate Russell is an immigration law clerk at Dale & Lessmann LLP and member in good standing of the Immigration Consultants of Canada Regulatory Council, and can be reached at [email protected] or (416) 369-7812. | |
