Articles - Focus on Franchising

On February 8, 2017, the Ontario Bar Association's Franchise Law Section and Sole, Small Firm and General Practice Section co-hosted an introductory franchise law seminar as part of the OBA Institute Program. The session was informative, well-received and saw record attendance. Congratulations to all those who participated!

The franchise relationship, although one of independent contractors, may give rise to a finding of liability on the part of a franchisor for the acts and omissions of its franchisees if certain precautions are not taken. In this article, Daniel So and Sara Michienzi consider three relatively recent human rights applications and the approaches adopted by the provincial human rights tribunals in evaluating such liability.

On February 1, 2017, British Columbia joined Alberta, Ontario, Prince Edward Island, New Brunswick and Manitoba to become the sixth Canadian province to enact franchise legislation. In this article, the authors discuss the fundamental aspects of the B.C. Act and provide a practical and useful comparison of the B.C. Act to franchise legislation in the other five regulated provinces.

A brief overview of this year's Annual Franchise Law Conference.

In July 2016, special advisors leading the review of the Labour Relations Act (Ontario) and Employment Standards Act (Ontario) released an interim report, titled "Changing Workplaces Review: Special Advisors’ Interim Report". This article provides an overview of the salient aspects of the Report, with a particular focus on how the proposed amendments stand to impact the franchise industry.

As of January 1, 2017, the Healthy Menu Choices Act will require food service chains with 20 or more locations in Ontario to disclose calorie information for most standard food and drink items on menus, labels, tags and signage. This article provides an overview of the various disclosure obligations imposed by the Act and discusses the Act's application to, and impact on, franchisors in the food service industry.

Franchise agreements often contain non-competition provisions or other restrictive covenants to prevent departing franchisees from using the knowledge and expertise gained during the term of their agreements to compete against the franchisor once the relationship is over. However, depending on the facts of each case and the specific terms in the franchise agreement, these non-competes may not be enforceable.

This article provides a basic-level overview of the issues associated with disclosure documents and their impact on franchisors, pursuant to the Arthur Wishart Act (the “AWA”). Disclosure is at the heart of the AWA - as stated by the Ontario Court of Appeal: “The purpose of the legislation is to protect franchisees and the mechanism for so doing is the imposition of rigorous disclosure requirements and strict penalties for non-compliance.”

While many franchisors are aware that they have disclosure obligations when granting a franchise to a prospective franchisee, many forget that they have the same disclosure obligations where a franchisee is selling their franchise to another franchisee.

The Arthur Wishart Act (Franchise Disclosure), 2000, S.O. 2000, c. 3 (“AWA”) came into force on December 15, 2009. The AWA provides certain inalterable rights and duties in the relationship between a franchisor and franchisee. These duties have been the subject of considerable litigation. However, there has been little discussion around the circumstances in which the AWA will not apply.