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Franchise Review October 2017

Oct 2017

Osler’s Franchise Review includes legislative updates, commentaries on recent cases and frequently asked questions as well as news on our team. In this edition, we explore Ontario’s proposed amendments to franchise legislation and the impact of proposed changes to the Income Tax Act on franchise systems. We also look at two cases that examine when franchisors may be responsible for their franchisees’ employees. In our FAQs, we continue our series looking at common concerns for those considering offering franchises in Québec.

 


Legislation

Ontario introduces amendments to franchise legislation
Dominic Mochrie, Sarah McLeod
Life may soon get a little easier for franchisors in Ontario. Changes are coming to the Arthur Wishart ActRead more

Franchisors take note: Proposed changes to the tax treatment of private corporations may restrict flexibility in franchise systems
Dov Begun, Paul Kotschorek
Changes to the lifetime capital gains exemption and income sprinkling may squeeze the flexibility of some franchise systems. Read more

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Franchising in the courts

Ontario Court of Appeal rejects role of an “informed decision” in rescission in Mendoza
Jennifer Dolman, Sarah McLeod
The Ontario Court of Appeal maintains the status quo in Mendoza v. Active Tire & Auto Centre Inc., confirming there is no new wiggle room for franchisors in disclosure. Read more

Can a franchisor be liable for discrimination against a franchisee’s employee?
Dominic Mochrie, Paul Kotschorek
In this case, the B.C. Human Rights Tribunal reconfirmed that being a franchisor is not a complete defence to a complaint of discrimination from a franchisee’s employee. Read more

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Québec

Québec Court of Appeal confirms consumer class action for false representations against a franchisor
Éric Préfontaine, François Laurin-Pratte
The judgment of the Court of Appeal in Ameublements Tanguay inc. c. Cantin constitutes a new warning to franchisors having a presence in Québec. Franchisors must ensure their status is well understood by customers of their franchisees. Read more

Supreme Court of Canada confirms the validity of perpetual contracts
Éric Préfontaine, François Laurin-Pratte
Forever is a long time. Parties must ensure their intentions are clearly recorded in their agreements. Read more

The importance of signing a proper franchise agreement 
Éric Préfontaine, François Laurin-Pratte
Don’t do it: Duchesneau c. Gestion Milsa inc. provides another lesson in regard to proceeding without a signed contract. Read more

Is a franchisee an employee?
Éric Préfontaine, Frédéric Plamondon, François Laurin-Pratte
Just because you call it a franchise doesn’t mean that it is. The Québec Court of Appeal finds an employment relationship under the building services employees decree. Read more

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Frequently asked questions – Franchising in Québec

Franchisors looking to expand business operations into Québec need to be mindful of the key differences in the franchise model in order to effectively tap into this potentially lucrative market and avoid legal issues.

View our responses to the following questions:

  1. Can I use a single franchise contract, or standard form contract, with all my Québec franchisees?

  2. If my franchise agreement is a contract of adhesion, what does it mean for a clause to be abusive?

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Kudos

Speaking engagements

Upcoming

American Bar Association’s 40th Annual Forum on Franchising, Palm Desert, California, October 18 - 20, 2017

  • Andraya Frith will present “Canadian Fundamentals of Franchising”

Ontario Bar Association's 17th Annual OBA Franchise Conference, Toronto, Ontario, November 16, 2017

  • Dominic Mochrie will present “Rise of the Machines: Advising Franchisors on Implementing Technology”
  • Evan Thomas will present the “Annual Legal and Legislative Update”
Past

Canadian Franchise Association Law Day Conference, Toronto, Ontario, September 2017

  • Christine Jackson co-chaired the conference
  • Andraya facilitated the round table session “Mitigating Joint Employer Risk Through the Franchise Agreement”
  • Jennifer Dolman presented “The Last Word on Franchise Law: Lessons for Businesses Arising from Canadian Appellate Court Decisions”

International Franchise Association's 50th Annual Legal Symposium, Washington, DC, May 7-9, 2017

  • Andraya presented “Ch-Ch-Ch-Ch-Changes: Implementing System Changes, Upgrades and New Directions Under Existing Franchise Agreements”
  • Dominic presented “Reddit and Weep? Protecting Your Brand and Reputation on Social Media – A Continuum of Approaches from Engagement to Litigation” 

Ontario Bar Association dinner program, Toronto, Ontario, April 12, 2017

  • Dominic presented “Disclosing in an AllStar World: Should Franchisors Change their Disclosure Practices?”

Media 

Jennifer was interviewed for and quoted in “Ontario confirms test for rescission,” Lexpert, July/August 2017

Jennifer was interviewed for and quoted in “Ruling strict about document disclosure,” Law Times, June 19, 2017

Jennifer was interviewed for and quoted in “Cross-border Franchising,” Lexpert’s U.S./Canada Cross-Border Guide – Corporate, June 9, 2017

Recognition

Acritas StarsTM2017

  • Jennifer is recognized as a Star Lawyer 

Best Lawyers in Canada, 2018

  • Andraya, Christine, Dominic, Gillian Scott, Jennifer and Larry Lowenstein are recognized in the area of Franchise Law

Best Lawyers in Canada, 2017

  • Andraya is recognized as a “Lawyer of the Year” in the area of Franchise Law

Chambers Canada: Canada's Leading Business Lawyers, 2018

  • Andraya, Dominic and Jennifer are recognized in the area of Franchising  –  Andraya and Jennifer are ranked in Band 1 and Dominic is ranked in Band 2
  • Franchise Group is ranked in Band 1

Chambers Global: The World’s Leading Lawyers for Business, 2017

  • Andraya is one of two Canadian lawyers individually ranked as a leading franchise lawyer
  • Osler ranked in Franchising (Band 4)

Franchise Times, 2011-2017

  • Dominic, Gillian and Jennifer are recognized as “Legal Eagles” by North American franchise peers in the Franchise Times’ annual review for their work in the franchise arena

Lexpert Guide to the Leading U.S./Canada Cross-Border Corporate Lawyers in Canada, 2017

  • Andraya, Dominic and Jennifer are recognized in the area of Franchising Law 

The Canadian Legal Lexpert Directory, 2017

  • Andraya, Dominic and Jennifer are listed as Most Frequently Recommended in the area of Franchising Law – Franchisor
  • Colin Feasby and Gillian are listed as Repeatedly Recommended in the area of Franchising Law – Franchisor

Who's Who Legal Canada – Franchise and Who's Who Legal Franchise, 2017

  • Andraya, Dominic, Gillian and Jennifer are recognized as leading lawyers

Who’s Who Legal Thought Leaders: Franchise 2017

  • Jennifer is named as expert

Legal community involvement

  • Jennifer continues as the Chair of the Ontario Bar Association’s Franchise Law Section for the 2017-2018 term

Publications

Jennifer is participating in the Who’s Who Legal “Franchise 2017: Roundtable”

Andraya, Dominic and Paul Kotschorek co-authored “Some good news for franchisors, but not out of the woods: Ontario’s proposed changes to employment and labour laws could still impact franchising,” Osler, Hoskin & Harcourt LLP, June 5, 2017

Andraya, Dominic and Paul co-authored “Ontario releases Changing Workplaces Review Final Report: Franchising gets more than it bargained for,” Osler, Hoskin & Harcourt LLP, May 24, 2017

Dominic co-authored "Reddit and Weep? Protecting Your Brand and Reputation in Social Media – A Continuum of Approaches from Engagement to Litigation," which was presented at the International Franchise Association's 50th Annual Legal Symposium, May 7-9, 2017

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