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Consumer & Retail Advisor

Tag Archives: franchisor

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

Ontario Court Implies Termination Clause in Oral Franchise Agreement on Summary Judgment

Posted in Franchising

In France v Kumon, 2014 ONSC 5890, the Ontario Superior Court determined on summary judgment that it was appropriate to imply a right of unilateral termination with reasonable notice into an oral franchise agreement between the plaintiff franchisee, Ms. France, and Kumon, the franchisor.

The circumstances giving rise to the dispute are as follows: Ms. France began as a Kumon franchisee in 1991, before Kumon required formal written franchise agreements. When Kumon introduced a standard franchise agreement in 1994, Ms. France refused to sign, believing the terms to be one-sided. Ms. France refused various further requests to sign … Continue Reading

Franchise Lessons to Be Learned From the Shoppers Drug Mart Certification Decision

Posted in Corporate Matters, Franchising

The Shoppers Drug Mart franchisees recently took another step forward in their class action lawsuit. Building on his earlier decision discussed here, Justice Perell for the Ontario Superior Court of Justice (ONSC) certified a number of elements of the plaintiffs’ action as a class proceeding. In this article, we have focussed on the three aspects of the decision that, in our view, are most significant to franchise and distribution systems.… 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