We are pleased to report that A&B litigation partners, Tim
Hill and Atoosa Mahdavian, recently won an appeal which reaffirms
their previous trial level success relating to the Arthur Wishart
Act (Franchise Disclosure), 2000, S.O. 2000, c. 3 (the
In a recent appeal, A&B defended a franchisor, Baton Rouge
Restaurants Corporation et al. ("BRRC"), in an appeal by
a franchisee who had unsuccessfully alleged at trial a breach of a
right of first refusal for an additional franchise location and
breach of disclosure obligations under the Act (See 3574423 Canada
Inc. v Baton Rouge Restaurants Inc., 2013 ONCA 39).
The appellant had commenced its action for damages on the basis
of an alleged breach of a contractual duty of good faith and a
breach of the statutory duty of fair dealing pursuant to the
At trial, it was held that the appellant had waived its right of
first refusal regarding a second planned franchise location when it
turned down an offer extended to it by BRRC. The appellant
unsuccessfully argued that BRRC failed to make full disclosure
regarding the details of the new location, and that it was a
"prospective franchisee" with respect to the new
ONTARIO COURT OF APPEAL DECISION
In his decision, the Honourable Justice Sidney Lederman of the
Ontario Court of Appeal dismissed the appellant's claim that
BRRC had failed to disclose relevant information regarding the
second franchise offer under the right of first refusal.
At trial, Justice Brown had determined that the appellant was
not entitled to disclosure under the Act regarding the additional
franchise, as the appellant never became a franchisee with respect
to the additional franchise. This case is valuable in that it
highlights the difference in the standard of disclosure required
under the Act for parties who become franchisees and for those who
do not. A potential investor who ultimately decides not to invest
in a franchise system will not have recourse under the Act
regarding claims of defective disclosure.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).