Franchising in the Cannabis Sector
In the wake of Canada’s legalization of recreational cannabis use and Ontario’s release of the licensing schemes for private cannabis sale, a number of cannabis companies have organized franchise systems to capitalize on this new market. As a result, potential franchisees and franchisors are seeking answers to a variety of questions with respect to cannabis […]
No Spooky Spectre for Franchise Suppliers: Supreme Court of Canada’s Recent Ruling on Duty of Care in Multipartite Contractual Relationships
The Supreme Court of Canada (SCC) released its decision in 1688782 Ontario Inc. v. Maple Leaf Foods Inc. on November 6, 2020. In coming to their decision, the five judge majority once again reiterated the well-established Canadian approach to limiting tortious claims for pure economic loss. Brief Facts Maple Leaf Foods Inc. (Maple Leaf) was […]
To Control or Not to Control? Hidden Employment Liabilities for Franchisors
The intersection of franchise and employment law in Ontario is worthy of comment. This intersection does not gain much attention and, if ignored, can lead to significant liability for franchisors. This liability primarily stems from two employee protections. The first protection is the combined “related” and “common” employer doctrine. In Ontario, under both the Labour […]
Repercussions of a Franchisor’s Failure to Disclose
When a prospective franchisee and a franchisor enter into a franchise agreement, the Arthur Wishart Act (The Act) requires the franchisor to disclose all material facts about the business, financial information about the franchisor, costs to establish the franchise, the franchise agreement, and any other ancillary agreements. The purpose of this requirement is to allow […]
Franchise Agreement Duration
When considering a franchise, there are many factors to examine, such as the location, costs, and possibly a lease. However, one item that often does not get as much attention as it deserves is the term (i.e. how long the franchise agreement is in place). The [length of] term can have a substantial impact on […]
Franchise Disclosure Documents During COVID-19
In Ontario, franchisors are required to provide a disclosure document to each potential franchisee before the franchisee signs a franchise agreement or makes a payment towards the franchise. The legislation sets out what must be included in a franchise disclosure document such as the business background, litigation history, bankruptcy or insolvency information of the franchisor; […]
Substance over Form: Notices of Rescission and the Wishart Act
The 2020 Court of Appeal decision of 2352392 Ontario Inc. v Msi, examined the issue of the necessary requirements for a valid notice of recession under Ontario’s Arthur Wishart Act (“Wishart Act”), more specifically, whether a pleading delivered in the course of litigation could constitute a valid notice of rescission, or whether a separate notice […]
Upcoming Changes to Ontario’s Franchise Legislation
The Ontario government recently confirmed that the long-awaited amendments to the Arthur Wishart Act (Franchise Disclosure), 2000, and the General Regulation, O. Reg. 581/00, made under the Act will be coming into force on September 1, 2020. Franchisors are welcoming these changes, which provide clarity to certain provisions of the legislation. In general, these amendments: […]
Considerations for Franchisors and Franchisees During the COVID-19 Pandemic
As the COVID-19 pandemic persists, franchisors and franchisees may be uncertain as to their rights and obligations under their existing franchise agreements and in providing and receiving disclosure documentation upon renewal, resale and entering into new franchise agreements. Continuous Operation Franchisees who have or may temporarily close their businesses as a result of the COVID-19 […]
