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Tag Archives: disclosure

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

Not So Fast! Ontario Court Finds Franchise Grant “Premature”

Posted in Franchising, Litigation

In the recent decision of Raibex Canada Ltd. v. ASWR Franchising Corp., the Ontario Superior Court of Justice allowed a franchisee to rescind its franchise agreement on the basis that it signed the agreement at a time when critical information regarding the costs to develop the franchise and leasing obligations had not yet come into existence.  As a result, the Court found that the franchise grant was “premature” and the disclosure document provided to the franchisee deficient.

At issue in this case, was the franchisor’s failure to provide details relating to a sublease and franchise development costs, … 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

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