News & Publications

Franchising

$500 Million Tim Hortons Class Action – A Warning for Franchisors Administrating Ad Funds

Written by on August 28, 2017.

Tim Hortons is the largest franchise system in Canada by number of franchised locations, operating with approximately 3,500 units nationally. Accordingly, any legal action relating to the business makes waves in the franchise community and serves as a warning to other franchisors. On June 19, 2017, an Ontario-based Tim Hortons franchisee filed a $500 million class action lawsuit (the “Claim”) against its franchisor, its franchisor’s parent, the company that distributes its advertising f...

EU-US Privacy Shield Framework – Does it Apply to Your Business?

Written by on August 21, 2017.

Background In late 2015, the highest court in the European Union invalidated the Safe Harbor data-transfer framework that ruled over the transmission of personal data between the EU and U.S. for approximately 15 years. The European Court of Justice held that the U.S. government’s repeated and surreptitious access to the data of EU residents violated EU privacy rules and invalidated the agreement. In response, the European Commission and the U.S. Government negotiated a new framework for tr...

Canada Consumer Product Safety Act – Does it Apply to Your Business?

Written by on August 18, 2017.

The Canada Consumer Product Safety Act (“CCPSA”) has the stated purpose of protecting the public by addressing or preventing dangers to human health or safety that are posed by consumer products in Canada, including those products that are imported.[1] The legislation defines a “danger to human health or safety” as an unreasonable hazard, either existing or potential, that is posed by a consumer product during its use or as a result of its normal or foreseeable use that may have an ad...

Franchising in Canada: have the wheels fallen off?

Written by on June 14, 2017.

(Note: This article was also published on AdvocateDaily.com) Introduction Last year was relatively quiet in terms of major (i.e. Court of Appeal) decisions or legislative changes. One interesting, and important, development is the increasing willingness of the courts to decide matters based on summary judgment motions, following the directive of the Supreme Court in Hryniak v. Mauldin. The Obsidian case is a prime example of this trend. Notwithstanding significant issues of credibility...

Unionizing Franchise Locations Could Become Easier Under Proposed Changes to Ontario Law

Written by on May 24, 2017.

The Ontario Changing Workplaces Review has now issued its Final Report, and there’s good news and bad news for franchisors. First, the good news: as we outlined in February, there were concerns that the Final Report would call for expanding the situations where franchisors would be considered the employers of a franchisee’s employees under Ontario’s Employment Standards Act, 2000 (the “ESA”). However, the panel has chosen not to recommend any substantive changes to the “related em...

Raibex decision alters franchise landscape on presale disclosure

Written by on May 04, 2017.

The disclosure obligations for franchisors expanded with a recent Ontario Superior Court of Justice ruling, and will change the way deals are struck in the province, says franchise lawyer Peter Dillon. In Raibex Canada Ltd. v. ASWR Franchising Corp., 2016 ONSC 5575 (CanLII), the judge found the development cost estimate provided to the franchisee was materially deficient and, as such, formed the basis of a valid rescission claim, he tells AdvocateDaily.com. Dillon, a partner with Siskind...

Potential Changes to Employment Legislation May Mean Increased Liability for Franchisors

Written by on February 28, 2017.

The Ontario Changing Workplaces Review’s final report is expected to be delivered in the next few weeks and, if some of the ideas contained in its interim report become law, franchisors may find themselves liable as employers of their franchisees’ employees, regardless of the franchisor’s actual level of control over the workplace. The Review began as a Government of Ontario initiative in early 2015, with the Review’s terms of reference directing two Special Advisors to provide recomm...

Raibex Canada Ltd. v ASWR Franchising Corp., Implications for Franchisors

Written by on January 18, 2017.

Executive Summary and Client Advisory This case, decided late in the late Fall of 2016 and currently under appeal, is potentially highly problematic to franchisors who sign franchise agreements with prospects before a site has been selected. In essence, the trial judge found that doing so is not in compliance with the Ontario’s franchise disclosure law, because the disclosure document provided does not contain all material facts relative to the franchise being sold. Based on the logic...

Franchising – Presale Disclosure Now Mandatory in British Columbia

Written by on January 17, 2017.

For those franchisors offering, or planning to offer, franchises in British Columbia, please take note that effective February 1, 2017, you must now provide a BC-compliant disclosure document to all franchise prospects at least 14 days prior to signing any agreement relating to the franchise, or accepting any payments in respect of the franchise. Although BC's franchise Regulation is substantially similar to that of other provinces, your existing disclosure document must be amended to account...

Franchising An Increasingly High-Risk Venture For Franchisors

Written by on December 06, 2016.

Canada is frequently hyped as an idyllic place to launch a franchise business, but that’s not the case for many franchisors who face tougher obstacles than their counterparts in other countries, says London franchise lawyer Peter Dillon. Compared to the U.S. and other jurisdictions, Canada's legislative history in the area of franchise law makes it “one of the most difficult jurisdictions in the world” in which to franchise, he tells AdvocateDaily.com. Franchising plays an important...