Of Paramount Importance

  • April 03, 2023
  • Lauren Baker

Premium Host Inc. v Paramount Franchise Group et al., 2023 ONSC 1507[1] is a trial decision from the Ontario Superior Court of Justice regarding three rescission claims under the Arthur Wishart Act (Franchise Disclosure), 2000.[2]  The three rescission claims, each brought by a different franchisee, were heard together.

The plaintiffs were franchisees of the “Paramount Fine Foods” system:

  • Versatile: the Versatile Action was a rescission claim related to the Front Street location, which was a new build-out;
  • Everest: the Everest Action was a rescission claim related to the Yorkdale location, which was a new build-out;
  • Premium Host: the Premium Host Action was a rescission claim related to the Heartland location, which involved a resale of an existing franchise.

In all three actions, it was alleged that the franchisor, Paramount Franchise Group Inc. ("Paramount”), had failed to provide the franchisee with a “disclosure document” within the meaning of the Wishart Act.  Accordingly, each franchisee rescinded its respective franchise agreement and claimed statutory compensation from the franchisor.  The franchisor defended the claims on the basis that the disclosure documents being relied upon by the franchisees were not the form of disclosure document given to them by the franchisor; the franchisor put into evidence its own versions of the disclosure documents it said it had provided to the franchisees.  The franchisor also disputed that the franchisees were disclosed on the dates they claim to have been disclosed.

The extensive trial decision required the trial judge to outline the various versions of events put forward by each party and make numerous factual determinations.  These factual findings will not be outlined in this summary.  This article will summarize the decision’s findings and conclusions about disclosure exemptions, so-called “generic” franchise agreements, and franchisor’s associates.