UTGB Vol 5.pdf - Robson Hall Faculty of Law

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the other way around. It is imperative to take this into consideration when
thinking about adding a "wrap·around" provision to Manitoba's franchise
legislation because of the origin of the foreign document that a franchisee would
be receiving. When one looks at the list of CFA members, it is clear that the
vast majority of franchisors coming into Canada hail from the United States. 56
Therefore, those franchisors coming into Manitoba will either be from the
United States or other Canadian jurisdictions.
According to Edward N. Levitt, if a franchisor comes to Manitoba from a
Canadian jurisdiction, with a Canadian disclosure document, a "wrap...around"
document for Manitoba makes good business sense. 57 The requirements vary
slightly from province to province, so adding a "wrap,around" clause will not be
too costly for the franchisor or confusing to the franchisee reading it.
Conversely, there would be a concern that a large and complex disclosure
document from a foreign jurisdiction would contain a great deal of inapplicable
information for prospective franchisees and as a result would not be clear and
concise. 58 This, however, may not be the case with a disclosure document from
the United States.
Currently, most U.S. franchisors use a uniform disclosure format called the
Uniform Franchise Offering Circular or UFOC, which will become mandatory
in 2008. 59 Thus, in a few years, all franchisors coming from the U.S. will have a
UFOC at their disposal. A typical UFOC contains considerably more
information than any of its Canadian counterparts. Therefore, a Canadian
franchisee will have more information at their disposal when making the
decision to purchase. The requirement that "plain English" be used and its
standardized format with clear headings will ensure that the document will be
clear and concise. 00 Therefore, if Manitoba were to adopt a "wrap...around"
provision, franchisees would still a comprehensible disclosure document and
franchisors will not have to go through the extra time and expense of
composing a new one.
In the alternative, although adding a "wrap, will make a document comply with
domestic law, the province's extensive disclosure requirements (whether they
emulate Ontario or the ULCC) may require that a franchisor change such a
considerable portion of the body of text of the UFOC to the extent that it may
56
Canadian Franchise Association, supra note 33.
57
Levitt, supra note 19.
58
Ibid.
59
Manitoba Law Reform Commission, supra note 14 at 36-37.
60
Peter Macrae Dillon, "The Case for the Use cf Wrap-Around Disclosure Documents in
" (Fall 2004) :!-1-:2 Franchise Law Journal 73 at 76; online: Siskinds Resources,
Articles of Interest at 5.