Okay Mom - Basic crash course in contract law but I would have to see the whole contract to answer a specific question.
Normally, a written contract overwrites any verbal agreement. If it's not written on the signed agreement, it doesn't count but there are some exceptions to this. Ideally every contract would also cover every potential situation but in reality, they are basic when dealing with small businesses. They cover the common issues and are simple and for the most part that is all that is needed. It's the more unusual situations which result in a difference of opinion that end up in Small Claims Court with a Judge having to decide what is fair, who was at fault, and having to fill in the gaps that the contract did not cover. And a Small Claims Court Judge does not just consider the law but also what is reasonable and fair to both sides. They have some discretion when making their Judgements.
An element of what is a reasonable expectation comes into play where a contract misses a situation which has occurred. Of course it's reasonable that a small business might want to increase it's customer base, or that a family gets a dog, that a dayhome with more children has an assistant. But if the clients were specifically sold a small ratio home, or a pet free home, or a carer who worked alone, then that parent is no longer getting the service which was described to them.
Small Claims although still based in the law, does allow an element of fair play and common sense so a biased contract wouldn't be enforced if the situation resulting from the case was unreasonable or unfair to either side.
There are three situations that arise with regards to your questions.
Firstly, fairness of the contract and unbiased terms that place one party in a situation of having advantage or a position of strength. It would be unfair to require a months notice for a child to leave if only giving 2 weeks notice of a change. Especially if that change resulted in the service no longer being what was described. That would be a biased/unfair contractual term and in Small Claims wouldn't hold up.
Any service provider can increase their costs or change their service. Any client can accept that change or walk away but if there is a process for them to leave it has to allow adequate time for them to do that before changes come into effect. For your friends to be seen as unbiased, any significant change to the service, terms, prices, or anything else should be notified to parents to give them sufficient time to consider the impact of the changes and submit their notice if they wish to.
The second situation is one few people realize. When any service provider makes a change, they are ending the original agreement and proposing another which they hope will be accepted. From the minute that change becomes effective, the old contract terms have ended. The contract that was in force has expired for everyone involved. A provider cannot end a contract but then expect the court to hold the parent accountable to it's expired terms. There is no contract to hold the parent to with regard to notice period or anything else. That said, if the parents remain in care after the change, there is an implied acceptance of the new terms.
And third situation.
Your friends need to understand that when they describe their service at interview, their descriptions of the service are part of what decides if a new parent is coming to the dayhome.
The parents are consumers and so depending on the situation, they might have additional claim under Consumer Rights. Consumer rights change in different provinces & territories but basically, when in comes to services, the consumer is entitled to receive a service as it was described to them which is another aspect that protects those parents who signed up with a pet-free dayhome and the parents who signed up with a small dayhome.
I would advise that
(a) Any change that affected the service was advised to parents in a timely manner so that the contract is not considered unfair or biased.
(b) The timing of notification should be equal to or greater than the notice period parents are held to for the contract to be viewed as unbiased.
(c) Providers have to understand that if they make a change, it is them who is ending the original agreement/contract and that agreement/contract is over from the second the change comes into effect. Any parent can walk away at that time because there is no contract.
(d) Even if a provider gives a months notice of a change and the parent knows instantly that they will not be staying, the parent does not have to share that information with the provider. The provider ended the contract from the date of the change and neither party can be held to the old terms.
(e) Be cautious when making claims about your service which might change in future. Once a set service is described even if not part of the written contract, it is part of the reasons people chose you over your competitor and you have an obligation to deliver what you described for the duration of the contract.