UTGB Vol 5.pdf - Robson Hall Faculty of Law

during and after the term of this agreement and that it shall ensure that such persons
will not use any such information in any other business or in any manner. 71
It should be noted that protecting franchise trade secrets and confidential
information benefits franchisees as well as the franchisor. Franchisees would
lose much of the economic value of their business if the information they rely
upon to operate their franchise became publicly available such that others could
easily duplicate the franchise business and then compete with actual
franchisees. n
From a franchisor's perspective, requesting that a franchisee sign a
confidentiality agreement before providing any disclosure is rather sensible. This
is because a franchisor will want to be sure that a franchisee will not steal any
secrets from the franchise, or refuse to sign the franchise agreement and then
open a competing store. From a franchisee's perspective, signing a
confidentiality agreement prior to receiving a disclosure document makes no
difference whatsoever. There is nothing at risk. The ULCC recommends that
confidentiality agreements should be able to be entered into prior to disclosure
and states that a prospective franchisee would not be prejudiced in this regard. 73
Therefore, to protect franchisors from unscrupulous franchisees that want to
steal trade secrets, Manitoba's legislation should allow franchisors to issue
confidentiality agreements before providing disclosure.
If Manitoba chooses to follow a format similar to Ontario's legislation, a
franchisor would be in violation of the Act by having the prospective franchisee
sign a confidentiality agreement before they receive a proper disclosure
document. Section 5 (1) (a) of the Ontario Act requires that a disclosure
document must be provided 14 days prior to the signing of any agreement.
Consequently, Manitoba would have to follow Alberta, P.E.I. and the ULCC
and specifically permit such pre disclosure confidentiality agreements by
excluding confidentiality agreements from the definition of a franchise
agreement. 74
iii. Site selection agreements
Unlike the Arthur Wishart Act (Franchise Disclosure), 2000, the P.E.l. and
Alberta Acts as well, as the UFA, exclude site selection agreements from the
71
Daniel F. So, Canadian Franchise Law Handbook, (Markham: LexisNexis Canada Inc.,
2005) at 143.
72
MarkS. VanderBroek & Christian B. Turner, "Protecting and Enforcing Franchise Trade
Secrets," (Spring 2006) 25:4 Franchise Law ]oumal191 at 192.
73
Uniform Law Conference of Canada, Uniform Franchise Act with Commentary, online:
Proceedings of Annual Meetings, 2004 Regina, Commercial Law Documents
at 15.
14
Levitt, supra note 53 at 20.