On February 9, 2026, the BC Ministry of Attorney General announced that the remaining provisions of the Business Practices and Consumer Protection Amendment Act, 2025 (Bill 4-2025) will come into force on August 1, 2026. Accompanying that announcement, Order in Council No. 35 prescribes the “low value claim” amount under the Business Practices and Consumer Protection Act (BPCPA) as $5,000, exclusive of interest and any costs, fees, expenses, or charges relating to the dispute.
Effective the same date, a new Part will be added 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 proceeding, and clauses that prevent a person from starting or joining a class action, will be inoperative for a low value claim. This framework includes franchise agreements, and means that mandatory arbitration and class action waivers contained in them cannot block a franchisee from pursuing claims which fall under the $5,000 threshold.
What Is a “Low Value Claim”?
Under the BPCPA amendments, claims below the prescribed threshold are treated as “low value claims”. 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.
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, previously 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.
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.
Franchisors should consider:
- Reviewing fee structures and disclosures – ensure all mandatory charges, levies, or mark-ups are clearly documented and defensible.
- Assessing recruitment representations – earnings claims or performance statements should be factually accurate and properly supported.
- Evaluating dispute resolution clauses – confirm arbitration, mediation, and forum selection provisions align with the statutory framework and understand that they cannot be used to block low value claims.
- Strengthening complaint-handling processes – early resolution mechanisms can help contain disputes before they escalate.
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. 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 August 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.
While a $5,000 threshold may appear modest, its impact on the franchise dispute landscape in British Columbia could be significant, particularly where small claims add up.
If you have any questions about the Bill, please contact Matthew Nakatsu, Allison Bruschetta or any other member of Alexander Holburn Beaudin + Lang LLP’s Business Disputes Group.
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