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Tag Archives: Franchise Legislation

BC Court Enforces Franchise Termination and Release Agreement

Posted in Franchising, Litigation

Overview

In the recent decision Dairy Queen Canada, Inc. v. M.Y. Sundae Inc., 2017 BCSC 358, the Supreme Court of British Columbia upheld a Mutual Cancellation and Release agreement in the context of a franchisor-franchisee relationship. The decision confirms that, absent evidence of duress or unconscionability, a franchisor is permitted to take advantage of a superior bargaining position, and obtain an enforceable release when a franchisee is in default.  The decision only considered common law principles as opposed to franchise legislation.  The Court also awarded damages for the tort of passing off against a franchisee who refused to … Continue Reading

BC Government Seeks Input on Franchises Act (Disclosure) Regulation

Posted in Consumer Protection, Corporate Matters, Franchising, Legislation, Retailing

As we recently wrote about here and here, BC will soon become the sixth Canadian province to enact uniform franchise legislation. On October 20, 2015, Bill 38 – Franchises Act passed Third Reading in the BC Legislature. The Provincial Government is now seeking input on the Franchise Act (Disclosure) Regulation (the “Regulation”). The legislation will come into force only after the Regulation is complete. The following is a summary of what to expect from the Regulation.

The proposed Regulation will specify what information must be included in a disclosure document and the methods of delivery.

Franchisors will benefit from … Continue Reading

BC Tables Bill 38 – Franchises Act

Posted in Franchising, Legislation

In recent years, British Columbia has been laying the groundwork for the introduction of franchise legislation in this province. We have posted about these initiatives on various occasions, including here and here. On October 5, 2015, these efforts culminated in the Provincial Government’s introduction (first reading) of Bill 38Franchises Act.

Bill 38 is modeled after the similar legislation already in force in Ontario, Alberta, Manitoba, New Brunswick and Prince Edward Island. It will govern franchise agreements for franchises operated either wholly or partly in British Columbia. Its overarching purpose is to balance protections for potentially vulnerable … Continue Reading

Franchise Legislation Introduced in British Columbia

Posted in Franchising, Legislation

British Columbia does not currently have any special franchise legislation. In late 2014, the Government of B.C. sought submissions from interested stakeholders on the question of whether B.C. should implement franchise disclosure legislation similar in structure to the legislation in force in Ontario, Alberta, Manitoba, New Brunswick and Prince Edward Island (previously discussed here). This development came on the heels of work completed by the British Columbia Law Institute (the “BCLI”), which recommended that B.C. should enact franchise legislation harmonized with other Canadian jurisdictions. For summaries of the BCLI’s Consultation Paper on a Franchise Act for British Columbia (2013) … Continue Reading

The Resale Exemption in Franchise Legislation: Court Confirms Narrow Application

Posted in Franchising, Legislation

Section 5(7) of the Arthur Wishart Act (Franchise Disclosure), 2000 (the “Act”) contains a number of exemptions which permit the grant of a franchise without the requirement to provide a prospective franchisee with a disclosure document. However, the courts have generally provided a narrow interpretation of these exemptions on the stated need to address the power imbalance between franchisors and franchisees.

In Brister v. 2145128 Ontario Inc., the Ontario Superior Court of Justice considered an application by a franchisee (the “Applicant”) to rescind a franchise agreement approximately 6 months after it had been signed. The … Continue Reading

Ontario Court of Appeal Again Narrowly Interprets the Resale Exemption in Ontario’s Franchise Legislation

Posted in Franchising, Legislation

In its recent decision in 2147191 Ontario Inc. v. Springdale Pizza Depot Ltd., 2015 ONCA 116, the Ontario Court of Appeal upheld a finding on summary judgment that a franchisor could not rely on the “resale exemption” from the disclosure requirements found in Ontario’s franchise legislation, the Arthur Wishart Act (Franchise Disclosure), 2000, SO 2000, c 3.  The court found that the franchisor’s role in the resale transaction went beyond that of a passive participant, thereby disentitling the franchisor from relying on the exemption.

The Arthur Wishart Act requires franchisors to provide a prospective franchisee with a proper … Continue Reading

Ontario Court Finds that Material Omission in Franchise Disclosure Document Provides Only 60-Day Rescission Right

Posted in Franchising, Legislation

The following article by Sarit Batner, Helen Fotinos, Brooke MacKenzie and Adam Ship may be of interest to readers of this blog: Ontario Court Finds that Material Omission in Franchise Disclosure Document Provides Only 60-Day Rescission Right.

In a significant recent decision, the Ontario Superior Court of Justice granted partial summary judgment in Caffé Demetre v. 2249027 Ontario Inc. the first franchise rescission claim to be decided since the new summary judgment test was set down by the Supreme Court of Canada in Hryniak v. Mauldin. The case is one of the first in which an Ontario court … Continue Reading

B.C. Even Closer to Enacting Franchise Legislation

Posted in Franchising

British Columbia has no special franchise legislation – franchise relationships are governed by the terms of franchise agreements and the common law of contracts. However, a new report reveals that interested parties are largely in favour of changing this regime through the introduction of franchise legislation. This consensus became clear after a year of consultations and studies by the British Columbia Law Institute (BCLI), which has now recommended the introduction of franchise legislation to the B.C. Legislature.… Continue Reading

B.C. Closer to Enacting Franchise Legislation

Posted in Franchising

 British Columbia is the third most populous province in Canada and is home to a huge variety of franchised businesses, yet the province lacks a legislative regime for franchising. According to the B.C. Branch of the Canadian Bar Association, small business owners comprise 98% of all businesses in the province and many of these businesses are franchises. In British Columbia, these potentially complex business arrangements are governed by the common law. This may soon change.

This month, the British Columbia Law Institute (BCLI) published a Consultation Paper on a Franchise Act for British Columbia (the “Consultation Paper”). The Consultation Paper … Continue Reading