Nov 8, 2016
A recent article in Canadian Lawyer InHouse discusses some of the legislative and regulatory limitations and inconsistencies that currently exist in the Canadian franchise landscape and how those challenges are affecting the franchising of U.S. brands in Canada. Journalist Janet Guttsman explains that while the ambiguity inherent in the Canadian legal environment means that both franchisees and franchisors require “comprehensive legal advice,” it doesn’t seem to be having a negative impact on the “steady growth” in franchising. In the article, Guttsman consults Jennifer Dolman, Osler partner and franchising expert, about Ontario’s legislative framework which is governed by the Arthur Wishart Act (Franchise Disclosure), 2000.
“It is akin to consumer protection legislation in that it is intended to protect the prospective franchisee, and the notion is that because franchises are typically longer term and require a significant investment, that a franchisee needs to be duly informed before they make that commitment,” Jennifer explains. “The legislation is designed in such a way to protect the franchisee and to try to address what is a power imbalance between franchisor and franchisee.”
She goes on to talk about the uncertainty surrounding the level of disclosure that the legislation requires, pointing to contradictory court rulings.
“We’ve had 15 years of Ontario legislation and there are still questions that are not being answered, and you get these decisions that in many instances people are not expecting at all when you look at what the actual language in the statute says.”
Read Janet Guttsman’s entire article “Canada still scores as franchise destination” in the October 31, 2016 issue of Canadian Lawyer InHouse.