Franchise employees in Ontario have the same basic employment rights as other workers. Whether you work at a restaurant, retail store or another franchise, you’re protected by Ontario employment laws.

If your franchise is sold, closes or fires you, you may also be entitled to severance pay.

Here’s who your employer is, what happens when ownership changes and what you’re owed if you lose your job.

💡 Know Your Rights: Franchise employees can qualify for full severance pay, including part-time and hourly workers. Depending on your circumstances, severance can reach up to 24 months’ pay.

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Who Is Your Employer if You Work at a Franchise in Ontario?

Your employer is usually the franchise owner operating your location, not the larger company whose name appears on the building.

For example, a restaurant may operate under a national brand while being owned by a local franchisee.

The franchise owner is usually responsible for:

  • Paying your wages and benefits
  • Setting your schedule and working conditions
  • Hiring and firing employees
  • Providing termination compensation when owed

The larger franchise company may set brand standards and workplace procedures. Whether it also has legal responsibilities as an employer depends on the actual working relationship.

What Employment Rights Do Franchise Workers Have in Ontario?

Franchise employees are protected by Ontario’s Employment Standards Act (ESA). Eligible full-time, part-time and hourly employees have rights including:

Your employer can’t deny these protections simply because you work for a franchise.

What Happens to Employees When a Franchise Is Sold in Ontario?

If your franchise changes owners and the purchaser continues employing you, your previous service generally counts under Ontario’s Employment Standards Act.

For example, if you worked at a franchise for eight years before it was sold, the new owner generally can’t treat you as a brand-new employee when calculating future ESA termination entitlements.

However, your employment rights can depend on how the business was sold and whether you’re offered continued employment.

What If the New Owner Doesn’t Keep You?

If the previous owner terminates your employment and the purchaser doesn’t hire you, the previous employer may owe termination pay and other compensation.

If you’re offered employment by the purchaser, don’t reject the offer or sign a new contract before understanding how it affects your rights.

A new agreement may contain clauses limiting future severance. Significant unwanted changes to your pay, hours or responsibilities can also raise constructive dismissal concerns.

Learn more about employee rights when a business is sold in Ontario.

What If Your Franchise Closes in Ontario?

A franchise closing doesn’t automatically eliminate employees’ severance rights.

This includes closures caused by:

  • Poor sales or financial difficulties
  • The franchise owner retiring
  • A franchise agreement ending
  • Restructuring or downsizing

If your employment ends, you may be entitled to outstanding wages, vacation pay and termination compensation. Bankruptcy or insolvency can affect your ability to recover the money owed.

Read our guide to employee rights when a company closes in Ontario.

How Much Severance Pay Do Franchise Employees Get in Ontario?

Non-unionized franchise employees can be entitled to substantially more than the minimum termination pay required by Ontario’s Employment Standards Act.

Your full severance entitlement can depend on:

  • Your age
  • Length of employment
  • Position and responsibilities
  • Availability of comparable employment
  • Your employment contract

Depending on these factors, severance pay in Ontario can reach up to 24 months’ pay. Part-time, hourly and salaried employees can all qualify for compensation.

Don’t assume a few weeks’ pay is all you’re owed. Use our free Severance Pay Calculator to estimate your entitlement.

Franchise Employees Ontario: Frequently Asked Questions

Do Franchise Employees Have the Same Rights as Other Workers?

Yes. Eligible franchise employees have the same Ontario employment standards protections as other workers, including minimum wage, overtime, vacation and termination rights.

Who Pays Severance When a Franchise Closes?

Your legal employer is generally responsible for termination compensation. This is usually the franchise owner operating your location, not necessarily the national brand.

Do I Lose My Seniority When a Franchise Gets a New Owner?

Not automatically. When a purchaser continues employing you and Ontario’s ESA continuity rules apply, your previous service counts toward employment standards entitlements.

Can Different Franchise Locations Pay Different Wages?

Yes. Independently operated franchises can offer different wages and benefits, provided they follow applicable employment laws and agreements.

Can a Franchise Owner Cut My Hours or Pay?

A significant reduction in regular hours or wages may be constructive dismissal. You could be entitled to severance even if you haven’t officially been fired. Get legal advice before resigning.

Can I Be Fired Without Severance if the Franchise Loses Money?

Financial difficulties don’t automatically cancel severance obligations. If you’re terminated without cause, your employer may still owe substantial compensation.

Fired or Laid Off From a Franchise in Ontario?

If your franchise has closed, changed ownership or fired you, don’t assume the severance package offered is everything you’re owed.

The Ontario employment lawyers at Samfiru Tumarkin LLP help non-unionized franchise employees recover compensation for wrongful dismissal, constructive dismissal and severance pay.

Before you sign, always check first.

Advice You Need. Compensation You Deserve.

Consult with Samfiru Tumarkin LLP. We are one of Canada's most experienced and trusted employment, labour and disability law firms. Take advantage of our years of experience and success in the courtroom and at the negotiating table.

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