UTGB Vol 5.pdf - Robson Hall Faculty of Law

98 Underneath the Golden Boy
3.Wrap..Around Disclosure Document
Regulations under the P.E.I. and Alberta Acts contain "wrap*around''
provisions. These permit a franchisor to use as its disclosure document a
document that has been authorized by the franchise laws of another
jurisdiction, if supplementary information is included which discloses any
additional information needed to make the foreign document comply with
domestic disclosure requirements. 52 For example, s. 3(2) of the regulations
under the P.E.I. Act states that a franchisor rray use a document that is
prepared and used to comply with the disclosure requirements under the
franchise law or jurisdiction outside Prince Edward Island as its disclosure
document to be given to a prospective franchisee in P.E.I., if the franchisor
includes supplementary information with that document to bring it into
compliance with the disclosure requirements under the P.E.I. Act. 53 The
question facing Manitoba is whether a wrap,around provision should be
included in its franchising legislation.
Prior to answering the question, it is helpful to consider the statutory
requirement of "clarity of disclosure." Section 5(6) of the Arthur Wishart Act
(Franchise Disclosure) 2000, demands that all information in a disclosure
document must be accurately, clearly and concisely set out. Since one of the
purposes of the Act is to rectify a perceived information imbalance between the
franchisor and a prospective franchisee, any disclosure that is confusingly
worded or formatted frustrates that purpose. 54 The requirement of "clear and
conciseu disclosure caters to parties unfamiliar with franchising. Arthur
Trebilcock states:
Try to see the disclosure through the mind of a reader wqo has no experience in
franchising, and no familiarity with the business being franchise d. [ ...] So if you draft a
disclosure document, take the time to provide a clear, concise description of the
required contract provisions. 55
Since this is quite a sensible requirement, it is important to maintain that
disclosure documents are both clear and concise even with the addition of a
uwrap."
As stated earlier, Manitoba is a franchisee province. Thus, for the most part,
franchisors are coming into Manitoba to sell their product and services, and not
52
Arthur J. Trebilcock, "Disclosure - The Advanced Course: Tricky Disclosure Issues and
Some Drafting Tips," (Paper presented to the Ontario Bar Association's 6[h Annual
Franchising Conference: The Domino Effect, November 2006) [OBA Continuing
Education: Toronto, 2006] at 12.
53
Edward N. Levitt, "Annual Legislative Update.'' (Paper presented to the Ontario Bar
Association's (Jh Annual Franchising Conference: The Domino Effect, November 2006)
IOBA Continuing Legal Education: Toronto, 2006] at 45.
5 4 Levitt, suP,.a note 19.
55
Ibid.