Law360 Canada (June 16, 2026, 10:48 AM EDT) --

Allison Bruschetta

Matthew Nakatsu

On Aug. 1, 2026, the remaining provision of the Business Practices and Consumer Protection Amendment Act, 2025 (Bill 4-2025) will come into force, following an announcement on Feb. 9, 2026, by the B.C. Ministry of the Attorney General.

Accompanying that announcement, Order in Council No. 35 prescribes the “low-value claim” amount under the Business Practices and Consumer Protection Act, SBC 2004, c. 2 (the BPCPA) as $5,000, exclusive of interest and any costs, fees, expenses or charges relating to the dispute.

Also coming into force is a new part to the Business Practices and Consumer Protection Regulation, B.C. Reg. 294/2004, implementing the low-value claim regime. While framed as consumer protection legislation, franchisors should take note: this change may affect how franchisees bring disputes and how franchisors manage risk.

Importantly, under the amended BPCPA framework, in contracts other than consumer contracts, dispute resolution clauses that require arbitration or another alternative dispute resolution process, and clauses that prevent a person from starting or joining a class action, will be inoperative for “low-value claims.” This framework includes franchise agreements, and means that mandatory arbitration and class action waivers contained in them cannot block a franchisee from pursuing claims that fall under the $5,000 threshold.

What is a ‘low-value claim’?

The BPCPA amendments define “low-value claims” as those at or below the $5,000 threshold described above.

Keeping the threshold for low-value claims monetarily low is by design. The $5,000 figure, calculated exclusive of interest and ancillary costs, is intended to streamline dispute resolution for smaller dollar claims. While modest in isolation, these claims can add up — especially in franchise systems with multiple units or recurring fees.

Another important consideration is that many low-value claims may ultimately fall within the jurisdiction of the British Columbia Civil Resolution Tribunal (the CRT). The CRT is designed to provide an accessible and comparatively inexpensive forum for resolving disputes. As a result, franchisees pursuing claims under the $5,000 threshold may face fewer procedural and financial barriers than they would in either traditional litigation or arbitration. For franchisors, this increases the likelihood that disputes that may previously have been abandoned for economic reasons will instead proceed to adjudication.

Why this matters in a franchise context

Franchise relationships often sit at the intersection of commercial law and consumer protection. While franchisors frequently rely on the characterization of franchisees as independent businesses, franchisees may attempt to invoke consumer protection legislation where the statutory language permits it — particularly in disputes involving fees, charges, mandatory purchases, advertising funds or representations made during the sales process.

The introduction of a defined low-value claim regime raises the possibility that certain franchise-related disputes, which could previously be cast off as uneconomical to litigate or arbitrate, may now be pursued more readily where the amount in issue falls under $5,000.

For franchisees, this may lower the practical threshold for bringing claims relating to discrete charges or alleged misrepresentations, particularly in the early stages of a franchise relationship. For franchisors, it increases the likelihood of facing a higher volume of smaller-value disputes, potentially across multiple franchisees, rather than a single aggregated claim.

While individual low-value claims may have limited financial significance, an adverse decision may encourage similar claims from other franchisees based on the same fee, practice or representation. In this way, the true risk associated with low-value claims may lie less in the amount claimed and more in the possibility of repeated challenges to system-wide practices.

Practical impacts for franchisors

For franchisors, the key concern is not the size of individual claims, but volume and systemic exposure. Multiple low-value claims can reveal gaps in fee disclosure, sales practices or operational policies, creating reputational and financial risk. Further, even a single successful low-value claim can open the floodgates for other franchisees to become litigants with similar allegations, increasing litigation costs for the whole system.

It also remains to be seen how adjudicators will address attempts to divide larger disputes into a series of smaller claims falling beneath the prescribed threshold. Franchisors should remain alert to situations where multiple related claims arise from the same underlying conduct, policy or contractual dispute.

It is important that franchisors take a close look at their systems to ensure they are ready to handle the new low-value claim regime. Among other things, franchisors should consider:

• Reviewing fee structures and disclosures: ensure all mandatory charges, levies or markups are clearly documented and defensible.
• Assessing recruitment representations: earnings claims or performance statements should be checked and rechecked regularly to ensure that they are factually accurate and properly supported.
• Evaluating dispute resolution clauses: confirm that arbitration, mediation and forum selection provisions align with the statutory framework and understand that they cannot be used to block low-value claims.
• Reviewing forum selection provisions: ensure that any contractual requirements regarding where disputes must be brought remain enforceable and operate as intended alongside the new statutory regime.
• Strengthening complaint-handling processes: early resolution mechanisms can help contain disputes before they escalate. A strong internal dispute resolution process can also keep grievances from spilling out into the rest of the system.

Considerations for franchisees

For franchisees, the prescribed threshold may provide a more accessible avenue to challenge discrete issues without the cost and complexity of traditional litigation. The low-value claims regime also does away with a number of current roadblocks to cost-effective litigation, namely mandatory arbitration clauses and limitations on class action proceedings.

That said, the regime is not a substitute for broader franchise remedies, and franchisees will still need to carefully assess jurisdiction, limitation periods and the availability of relief under other statutes, including franchise-specific legislation.

Looking ahead

With an in-force date of Aug. 1, 2026, franchise systems have a meaningful window to prepare. That preparation should include reviewing standard form agreements, disclosure documents and internal complaint-handling processes to account for a dispute landscape in which low-value claims are easier to bring — and harder to ignore, particularly where a number of small claims begin to add up.

A proactive approach is necessary, particularly for franchisors who have relied on building high barriers to entry into litigation in their franchise agreements to stymie low-value lawsuits. Those barriers are coming down, leaving strong internal systems as the best remaining defence.

More broadly, the amendments reflect a legislative policy choice to prioritize access to dispute resolution over contractual mechanisms that increase the cost of pursuing smaller claims. Franchise systems that have historically relied on arbitration requirements or other procedural barriers to discourage low-value disputes should expect increased scrutiny of routine fees, charges and operational practices.

If you have any questions about the bill, please contact Allison Bruschetta, Matthew Nakatsu or any other member of Alexander Holburn Beaudin + Lang LLP’s Franchise Group.

Allison Bruschetta is a member of Alexander Holburn’s Franchise, Business Disputes, and Labour & Employment practice groups. She has experience in a broad range of litigation matters, including shareholder, partnership, employment and franchise disputes. Allison focuses on providing strategic and practical litigation advice to clients operating in a diverse range of industries. She has represented clients at the British Columbia Supreme Court, Nova Scotia Supreme Court, the Provincial Court of British Columbia, the Civil Resolution Tribunal, the B.C. Human Rights Tribunal and numerous other provincial courts across Canada.

Matthew Nakatsu is a member of Alexander Holburn’s Franchise, Business Disputes, and Wills, Estates + Trusts practice groups. His practice is primarily and predominantly litigation-based. Matthew has assisted clients in matters before all levels of court in British Columbia, as well as the B.C. Human Rights Tribunal and WorkSafeBC’s Review Division. His franchise practice is focused around resolving franchise disputes, having acted for both large, multinational franchisors and individual franchisees.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the author’s firm, its clients, LexisNexis Canada, Law360 Canada or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

Interested in writing for us? To learn more about how you can add your voice to Law360 Canada, contact Analysis Editor Richard Skinulis at Richard.Skinulis@lexisnexis.ca or call 437-828-6772.