UTGB Vol 5.pdf - Robson Hall Faculty of Law

100 Underneath the Golden Boy
be easier to create a new one to comply with Manitoba law. 61 The Ontario
Superior Court of Justice commented on the use of a UFOC in 1518628 Ontario
Inc. v. Tutor Time Learning Centres LLC. 62 The court noted that the 2QQ,page
UFOC did not meet Ontario's requirements because it did not have to be
updated to reflect all material facts as they existed on the date that it was
delivered to the prospective franchisee. Not only is it significant that the
Superior Court rejected the UFOC as proper disclosure, but also, and primarily
in this instance, the UFOC was a 200...page document. If a wrap.-around clause
is added to such an extensive document, it is quite possible that it will cease to
be as clear and concise as required by law, creating more difficulties for the
franchisee.
Assuming that the majority of franchisors enter Canada through Ontario,
rather than Alberta, they will have to create a "new" disclosure document in
compliance with the Arthur Wishart Act (Franchise Disclosure), 2000. 63
Consequently, when that same franchisor comes to Manitoba from Ontario, it
will already have in its possession a Canadian disclosure document that will be
easily adaptable to meet Manitoba's requirements. Therefore, compliance by
means of a wrap will be accomplished easily, clearly and concisely.
To accomplish the clarity requirement while using a wrap, Manitoba's
legislation should demand that franchisors provide both an index and summary
of provisions. Doing so will allow franchisees reading the document to not only
navigate through it with great ease but also to read the addenda and body
together as one. Thus, when a franchisor decides to use a wrap, he will also
have to include an index and summary to meet the clarity requirement. The
layout of disclosure documents will be discussed later under the heading
"Additional Suggestions."
In conclusion, Manitoba should only adopt a wrap provision if it also adopts the
requirement that disclosure documents be clear and concise. This will ensure
that franchisees will receive documents that meet the purpose of the Act, that
is, to help them make well informed decisions. Moreover, if a franchisor foresees
that adding a wrap will not produce a clear document, they will have the option
of producing one specific for Manitoba. 64 In addition, :M:tnitoba legislation
should enforce the application of indexes and summaries when a wrap is used,
allowing the reader to navigate through them with greater ease. At the same
61
Debi M. Sutin & Arthur J. Trebilcock, "The Case Against the Use of Wrap,Around
Disclosure Documents in Canada,'' (Fall2004) 24:2 Franchise Law]ournal83 at 83.
62
(2006] CarswellOnt 4593.
63
Sutin & Trebilcock, supra note 61.
64
Edward N. Levitt, "The Prince Edward Island Franchises Act: Canada's Newest Franchise
Statute," online: Mondaq, Canada: Franchise & Distribution @ Gowlings -November
2006 . To view article, you must
become a member of "mondaqn at no cost.