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Article

Franchise & Distribution: 2015 Year in Review

Date

February 8, 2016


McCarthy Tétrault’s Franchise & Distribution Group is pleased to provide the 2015 Year in Review, gathering articles written by our lawyers in the past year about developments in Canadian law that may be of interest to franchised businesses.

This release includes four sections. Please click on the links below to go directly to a specific section:

For more information please contact the Group's Co-Chairs, Adam Ship or Helen Fotinos.

STATUTORY DISCLOSURE ISSUES

Ontario Court Allows Franchisor to Rely on Buy/Sell Exemption to Disclosure and Enforces Restrictive Covenant
In MEDIchair LP v. DME Medequip Inc. (“MEDIchair”), the Ontario Superior Court of Justice (the “Court”) considered whether a restrictive covenant contained in a franchise agreement is enforceable by a franchisor, MEDIchair LP (the “Franchisor”) against…→Continue Reading

Ontario Superior Court of Justice Finds that Shareholders of a Franchisee are not “Franchisees” within the Meaning of the Arthur Wishart Act
In 2313103 Ontario Inc. et. al. (“231”) v JM Food Services Ltd. et. al. (“JM”), the Ontario Superior Court of Justice (the “Court”) considered whether the shareholders of a corporate franchisee (“Franchisee”) can invoke the same statutory rights afforded…→Continue Reading

FDD Exemptions in Canadian Franchise Legislation: Court Confirms Narrow Application
In an earlier post, we discussed the Brister v. 2145128 Ontario Inc. case of the Ontario Superior Court of Justice (the “Brister Post”), which discussed the exemptions under the Arthur Wishart Act (Franchise Disclosure), 2000 (the “Act”)…→Continue Reading

The Resale Exemption in Franchise Legislation: Court Confirms Narrow Application
Section 5(7) of the Arthur Wishart Act (Franchise Disclosure), 2000 (the “Act”) contains a number of exemptions which permit the grant of a franchise without the requirement to provide a prospective franchisee with a disclosure document…→Continue Reading

Ontario Court of Appeal Again Narrowly Interprets the Resale Exemption in Ontario’s Franchise Legislation
In its recent decision in 2147191 Ontario Inc. v. Springdale Pizza Depot Ltd., 2015 ONCA 116, the Ontario Court of Appeal upheld a finding on summary judgment that a franchisor could not rely on the “resale exemption” from the disclosure requirements found in…→Continue Reading

Franchise Update – Court of Appeal Considers Scope of Basket-Clause Disclosure of Material Facts under Ontario Franchise Legislation
In its recent decision in Caffé Demetre Franchising Corp. v. 2249027 Ontario Inc., 2015 ONCA 258, the Ontario Court of Appeal upheld the Superior Court’s decision (which we previously wrote about here) granting partial summary judgment dismissing a franchisee’s…→Continue Reading

The Ontario Court of Appeal Finds Franchise Disclosure Document Fatally Deficient
In 2240802 Ontario Inc. v. Springdale Pizza Depot Ltd., the Ontario Court of Appeal (the “Court”) held that a franchise disclosure document provided by a franchisor to a franchisee contained certain material deficiencies such that it effectively amounted to no disclosure…→Continue Reading

Franchise Legislation Introduced in British Columbia
British Columbia does not currently have any special franchise legislation. In late 2014, the Government of B.C. sought submissions from interested stakeholders on the question of whether B.C…→Continue Reading

A Healthy Debate, Revisited: Amendments to Ontario’s Proposed Menu Labelling Legislation from the Perspective of Franchisors
Earlier this year, the Legislative Assembly of Ontario resumed its debate of Bill 45, an act aimed at enhancing public health by enacting, among other statutes, the Healthy Menu Choices Act, 2015 (the “Act”)…→Continue Reading

 

LEGISLATIVE DEVELOPMENTS

BC Government Seeks Input on Franchises Act (Disclosure) Regulation
As we recently wrote about here and here, BC will soon become the sixth Canadian province to enact uniform franchise legislation. On October 20, 2015, Bill 38 – Franchises Act passed Third Reading in the BC Legislature. The Provincial Government is now seeking input …→Continue Reading

Bill 38 – Franchises Act Passes Third Reading in BC
On October 6, 2015 the B.C. Provincial Government introduced Bill 38 – Franchises Act in the Provincial Legislature. We posted here, discussing the Bill’s primary contributions to the law governing franchises in B.C…→Continue Reading

BC Tables Bill 38 – Franchises Act
In recent years, British Columbia has been laying the groundwork for the introduction of franchise legislation in this province. We have posted about these initiatives on various occasions, including here and here…→Continue Reading

Changes to transfer pricing policy create opportunities and obligations for importers
The transfer pricing policy recently adopted by Canada Border Services Agency provides new obligations for importers of goods subject to duty-free treatment but also creates the opportunity, under certain circumstances, for importers of goods to claim a refund of custom…→Continue Reading

A Healthy Debate: The Second Reading of Ontario’s Menu Labelling Legislation
On February 17, 2015, the Legislative Assembly of Ontario resumed its debate of Bill 45, the Healthy Menu Choices Act, 2014 (the “Act”). The Act was introduced on November 24, 2014, as part of the province’s strategy to reduce childhood obesity and overall…→Continue Reading

Amendments to the Guarantees Acknowledgment Act (Alberta) and Its Impact on Franchise Transactions in Alberta
Effective April 30, 2015, the new Notaries and Commissioners Act (“NCA”) comes into force in Alberta. As discussed in the newsletter dated April 20, 2015, the NCA contains certain consequential amendments to the Guarantees Acknowledgment Act (Alberta)…→Continue Reading

 

OTHER CASE LAW DEVELOPMENTS

Ontario Court of Appeal Dismisses Pet Valu Class Action, Clarifies the Scope of the Duty of Good Faith and Fair Dealing and Calls for Greater Judicial Restraint
The recent decision of the Ontario Court of Appeal in 1250264 Ontario Inc. v. Pet Valu Canada Inc., 2016 ONCA 24 clarifies and narrows the scope of the duty of good faith and fair dealing imposed on franchisors under section 3 of the Arthur Wishart Act…→Continue Reading

Ontario Court Grants Injunction to Protect Franchisor from Rogue Franchisees
In Home Instead Inc. v. 244674 Ontario Inc. et al. (“Home Instead”), the Ontario Superior Court of Justice (the “Court”) considered the granting of an injunction against the franchisees, 244674 Ontario Inc. et al. (“244”) leading to the termination of their businesses…→Continue Reading

Ontario Court Denies Leave to Appeal for Addison Chevrolet
On October 30, 2015, the Divisional Court dismissed a motion brought by the Plaintiff franchisees for leave to appeal the decision of the Ontario Superior Court of Justice in Addison Chevrolet Buick GMC Ltd. v. General Motors of Canada Ltd. In that decision…→Continue Reading

Ontario Court Stays Franchisees’ Class Action in Favour of Arbitration Clause in Franchise Agreement
In 1146845 Ontario Ltd. v. Pillar to Post Inc., 2014 ONSC 7400, the Ontario Superior Court of Justice stayed a class action brought by plaintiff franchisees against the franchisor in favour of an arbitration clause in the franchise licensing agreement…→Continue Reading

The Lens of Commercial Reality: Lessons to be Learned from the First Common Issues Franchise Trial
The recent common issues trial in Trillium Motor World Ltd. v. General Motors of Canada Ltd. contains some interesting lessons for future cases involving system changes, in particular the court’s recognition that challenges to franchisor decisions on system-wide issues...→Continue Reading

Not Everyone is a Party: Some Comfort for Foreign Franchisors
A recent case, Addison Chevrolet Buick GMC Limited et al. v. General Motors of Canada Limited et al. (“Addison GMC”), considered the role of a foreign franchisor that is not a party to the applicable franchise agreement…→Continue Reading

Québec Court of Appeal Recognizes Implied Obligations in Franchise Agreement: What Does This Really Mean?
The Québec Court of Appeal has recently released its long awaited decision in Dunkin’ Brands Canada Ltd. c. Bertico inc., 2015 QCCA 624 reading into the franchise agreement an implied contractual obligation on the part of the franchisor to protect and enhance its…→Continue Reading

Ontario Court of Appeal refuses to read down or sever general release clause in franchise agreement
The Ontario Court of Appeal recently upheld a decision (which initial decision we wrote about here) striking down a general release clause in a franchise agreement, even though the franchisor sought to be released from non-statutory claims only…→Continue Reading

Ontario Court Endorses Single Forum for National Dealer Network Dispute
A recent Ontario decision, Stuart Budd & Sons Limited v. IFS Vehicle Distributors ULC, 2015 ONSC 0519 (“Stuart Budd”), provides an example of the courts of one province agreeing to hear a dispute involving franchisees from across Canada, over the objections...→Continue Reading

The Court of Appeal of Québec Declares Valid a Perpetual Renewal Clause
In Uniprix Inc. v. Gestion Gosselin et Bérubé Inc., 2015 QCCA 1427, the Court of Appeal of Québec dismissed the appeal by Uniprix Inc. (“Uniprix”) of a judgment of the Superior Court of Québec rendered in December 2013 where a renewal clause in a contract…→Continue Reading

Update: Dunkin’ Donuts on its way to the Supreme Court of Canada
We previously wrote about the decision rendered by the Québec Court of Appeal against Dunkin’ Brands Canada Ltd. in connection with its litigation with its franchisees. Dunkin’ Brands Canada Ltd. has filed an application for leave to appeal to the Supreme Court of Canada…→Continue Reading

Ontario Court Upholds Restrictive Covenants In Franchise Agreement
Franchise agreements often contain covenants restricting the activities of a franchisee both during the term of the franchise agreement and for a period afterwards…→Continue Reading

 

GENERAL TOPICS OF INTEREST

McCarthy Tétrault Continuing Professional Development Day: The year in review in the fields of consumer goods, retailing and franchising in Québec
McCarthy Tétrault multidisciplinary teams working in the fields of consumer goods, retailing, franchising and distribution are hosting a luncheon during which we will discuss the developments of particular interest for Québec retailers in 2015…→Continue Reading

Prepare to Launch – Part 1: Insights from Vancouver Start-up Week
Readers that are in the early stages of their business or approaching a growth phase may find this post by Genevieve Pinto and Maureen Gillis sharing insights from our recent Vancouver Start Up Week Prepare to Launch panel event to be of interest…→Continue Reading

Doing Business in Canada: Read the latest updates to our popular guide
McCarthy Tétrault’s Doing Business in Canada is an indispensable reference tool for lawyers and business persons regarding the legal aspects of establishing or acquiring a business in Canada. The newest edition reflects legislative changes including:...→Continue Reading

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