UTGB Vol 5.pdf - Robson Hall Faculty of Law

franchisor's legal history. However, since mediation/arbitration is often
conducted and decided in confidence, a franchisor S:lould only be obliged to
disclose the number of cases that were addressed through mediation/arbitration
in the past 10 years. In addition, terms of settlement should not be disclosed as
it would constitute a breach of the confidential nature of mediation/arbitration,
and may dissuade franchisors from being cooperative in future disputes.
The Law Reform Commission also recommends disclosing settled litigation and
terms of settlement. Settled litigation should be treated the same as
mediation/arbitration results. Consequently, Manitoba should require
franchisors to disclose the result and not the terms of settled litigation. Doing so
will not only allow the franchisee to determine if the franchisor is reasonable
and will settle, rather than being litigious. rut it will also clearly. portray the
franchise•s legal history.
(3) Manitoba's legislation should also include a provision whereby the
franchisor must disclose franchise support resources and methods. This will not
only allow a franchisee to choose a franchise that provides them with the
desired support but will also benefit the franchisor that has such a system in
that they will be preferred by several franchisees. This provision will be
beneficial to both parties.
Manitoba would not be the first jurisdiction to adopt such a provision. For
instance, Australia's Trade Practices Act 1974 requires that a franchisor provide
its potential franchisees with a summary of the conditions of the franchise·
agreement that deal with obligations of the franchisor, including an obligation
to provide training both before and after the franchised business starts. 50
Furthermore, Article 142 Bis of Mexico's Law to Develop and Protect Industrial
Property requires that a franchisor disclose to the franchisee all the necessary
training required by the franchisee•s employees, including the manner in which
the franchisor will provide technical assistance. 51
(4) Last, repeated sales of the same franchised outlet should be added to the
disclosure requirements. A franchisee needs to know if the same franchise
location has been sold repeatedly. This will in tum prevent a franchisor from
constantly re·selling the same location, knowing that it will shut down soon,
while blaming the franchisee for the store's failure and keeping the franchisee's
deposit and other fees. In other words, this will alert a franchisee to either not
get involved with a franchisor offering a location that has closed several times in
a short period of time or adjust the price to reflect the poor location.
50
51
Australia, Trade Practices (Industry Codes Franchising) Regulations 1998, SR 1998 No. 162
[Franchising Regulations] online: FCA Franchising Code of Conduct at s. 15.1(a).
Camara de Diputados del H. Congreso de La Union (Centro de Documentacion,
Informacion y Analisis), Ley de Ia Propiedad Industrial, online: .