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Tag Archives: Arthur Wishart Act

Ontario Court of Appeal Narrows the Availability of Franchise Rescission

Posted in Franchising, Retailing

On January 25, 2018, the Ontario Court of Appeal (the “OCA”) released its much-anticipated decision in Raibex Canada Ltd. v. ASWR Franchising Corp. In a business-friendly decision overturning the lower court’s decision, the OCA narrowed the availability of rescission for franchisees, reinforcing the importance of recognizing the distinction between “no disclosure” and “imperfect disclosure”, and further re-focusing the test for the availability of rescission under s. 6(2) of the Arthur Wishart Act (Franchise Disclosure) (the “Act”) to an analysis of whether the franchisee was effectively deprived of the opportunity to make an informed investment decision.

 There are four key takeaways Continue Reading

Happy FranCanada Day – Electronic Delivery of FDD’s in Ontario on July 1st

Posted in Franchising, Legislation

Further to our update in April Ontario has approved the amended regulations to the Arthur Wishart Act (Franchise Disclosure), 2000 to permit electronic delivery of franchise disclosure documents (“FDD’s”).  Regulation 581/00 comes into effect July 1, 2016.

Effective July 1, 2016, franchisors will now be able to deliver FDD’s electronically or by courier, in addition to the previously approved methods of in person or registered mail delivery. The complete changes may be viewed here.

With these amendments, Ontario franchise legislation has received a mini-modernization-makeover.

The new legislation provides that electronically delivered FDD’s must meet the following conditions:

  • be in
Continue Reading

Ontario Court Allows Franchisor to Rely on Buy/Sell Exemption to Disclosure and Enforces Restrictive Covenant

Posted in Franchising, Transactions

In MEDIchair LP v. DME Medequip Inc. (“MEDIchair”), the Ontario Superior Court of Justice (the “Court”) considered whether a restrictive covenant contained in a franchise agreement is enforceable by a franchisor, MEDIchair LP (the “Franchisor”) against its corporate franchisee, 2169252 Ontario Inc. (“216”) and its two principals, Allison Rolph and Ron Seiderer (collectively, the “Respondents”).The Court also considered circumstances where a franchisor may rely on the exemption set forth in Section 5(7)(a)(iv) of the Arthur Wishart Act (Franchise Disclosure), 2000 (the “Act”) to avoid the disclosure obligations … Continue Reading

Ontario Superior Court of Justice Finds that Shareholders of a Franchisee are not “Franchisees” within the Meaning of the Arthur Wishart Act

Posted in Franchising, Litigation

In 2313103 Ontario Inc. et. al. (“231”) v JM Food Services Ltd. et. al. (“JM”), the Ontario Superior Court of Justice (the “Court”) considered whether the shareholders of a corporate franchisee (“Franchisee”) can invoke the same statutory rights afforded to franchisees under the Arthur Wishart Act (Ontario) (the “Act”). The ruling of the Court confirms that shareholders of a Franchisee must look to the remedies and rights afforded to them in applicable corporate legislation (in this case the Business Corporations Act (Ontario) (the “OBCA”)) rather than the … Continue Reading

FDD Exemptions in Canadian Franchise Legislation: Court Confirms Narrow Application

Posted in Franchising, Retailing

In an earlier post, we discussed the Brister v. 2145128 Ontario Inc. case of the Ontario Superior Court of Justice  (the “Brister Post”), which discussed the exemptions under the Arthur Wishart Act (Franchise Disclosure), 2000 (the “Act”).  In 2256306 Ontario Inc. v. Dakin News Systems Inc. (“Dakin”) the Ontario Superior Court of Justice (the “Court”) had the opportunity to further confirm the limited application of section 5(7) of the Act.

In Dakin, the Court considered an application by a franchisee (the “Plaintiff”) to rescind a franchise agreement on the … 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

A Commentary on a Recent Development in Ontario’s Franchise Legislation

Posted in Franchising

The following Canadian Appeals Monitor post by Hovsep Afarian may be of interest to readers of this blog:

A Commentary on a Recent Legal Development in Ontario’s Franchise Legislation

The Supreme Court of Canada denied leave to appeal this week in one case of interest to Canadian businesses.

In Springdale Pizza Depot Ltd. et al v. 2189205 Ontario Inc. et al, the Supreme Court of Canada  declined to grant leave to appeal from an Ontario Court of Appeal decision which addressed the availability of the right of set-off in the context of a statutory right of rescission in Ontario’s … Continue Reading

Drafting General Release Clauses in Franchise Agreements: A Cautionary Tale from the Ontario Superior Court of Justice

Posted in Franchising, Litigation

The following article may be of interest to readers of this blog:

Drafting General Release Clauses in Franchise Agreements: A Cautionary Tale from the Ontario Superior Court of Justice

The Ontario Superior Court of Justice recently struck down a general release clause in a franchise agreement, even though the franchisor only sought a release with respect to non-statutory claims. The case provides important guidance regarding how to draft a release that will withstand scrutiny under section 11 of the Arthur Wishart Act (Franchise Disclosure) (Act) and the parallel provisions in the franchise legislation in Alberta, Manitoba, New Brunswick and P.E.I. … Continue Reading

Ontario Court of Appeal Considers Scope of Franchisor’s Duty to Disclose Outside Mandatory Disclosure Context

Posted in Corporate Matters, Franchising, Real Estate

In an important new decision for franchisors, 3574423 Canada Inc. v. Baton Rouge Restaurants Inc. (Baton Rouge), the Ontario Court of Appeal (ONCA) recently considered the scope of informational disclosure a franchisor is required to provide to one of its franchisees outside the context of statutory disclosure obligations. In Baton Rouge, the ONCA considered the scope of a franchisor’s duty of good faith when supplying an existing franchisee with information concerning a new location.

This appeal was from a 2012 trial decision of Justice Brown, which we previously discussed here. The trial decision clarified a number of issues … Continue Reading