People Mentioned
Partner, Disputes, Toronto
A temporary injunction was recently granted by the Ontario Superior Court which enforces non-competition clauses in two Keller Williams franchise agreements. This finding has prompted uncertainty and raises questions by real estate agents and brokers on the practical implications in the real estate sector.
In a recent interview with Real Estate Magazine, Jennifer Dolman, partner in Osler’s Disputes practice, discussed the legal framework in the Keller Williams injunction. It’s very difficult for franchisees to establish a fundamental breach in franchising. In this case, the judge reviewed the evidence and sided with the franchisor, finding that the alleged breaches did not give the franchisees a right to walk away. This emphasizes the risk franchisees take when trying to exit a franchise without clear termination rights.
Jennifer provides some further context, “. . . it’s an interlocutory decision, and we know that there [are] motions to seek leave to appeal from it . . . Franchisees typically do not have a right to unilaterally terminate.” Jennifer continues, “[t]his is the franchisor system that they are licensing and sharing with the franchisee, and so a franchisee, in the absence of having a contractual right to terminate, or in the absence of having agreed to an orderly wind down with the franchisor, does not have the right to just abandon their franchise, and doing so is risky and will have potentially negative consequences.”
Jennifer highlights the decision’s precedential significance to industry professionals seeking to better understand its implications.
People Mentioned
Partner, Disputes, Toronto
