UTGB Vol 5.pdf - Robson Hall Faculty of Law

selection documents from the definition of franchise agreements, allowing a
franchisor to issue the former prior to the latter.
B. Exemptions
The general policy behind the disclosure requirement is to provide prospective
franchisees with information relating to the franchise, the franchise system, and
the costs of operating and establishing a franchised business. There are a
number of provisions in place in all regulated Canadian jurisdictions whereby
franchisors may be exempt from delivering a disclosure document to a
prospective franchisee or financial statements in conjunction with the
production of a disclosure document. 79 The question facing Manitoba at the
moment is whether the ability to exempt certain franchisors from the
requirement to provide financial statements, or to implement other exemptions
from the requirements of legislation or regulations is appropriate. 00
I. General Exemptions from Legislation or Regulations
Broadly speaking, general exemptions from franchise legislation and regulations
exempt a party selling or renewing a franchise in certain circumstances from
having to provide disclosure documents. The question facing Manitoba under
this heading is whether the ability to implement exemptions from the
requirements of legislation or regulations is appropriate.
Every regulated jurisdiction in Canada has implemented general exemptions.
Section 5 of the Alberta Franchises Act, 81 s. 5 (7) of Ontario's Arthur Wishart Act
(Franchise Disclosure), 2000, and s. 5(7) of P.E.I.'s Franchises Act cover the
authorized exemptions in each province. Since every regulated jurisdiction in
Canada contains exemptions, Manitoba should not be the exception. The fact
that each Act contains exemptions does not mean that a potential franchisee
will be forced to purchase a franchise without sufficient information about the
business. For example, s. 5(7)(c) of the Arthur Wishart Act (Franchise
Disclosure), 2000 states that disclosure requirements will not be enforced in the
grant of an additional franchise to an existing franchisee if:
• That additional franchise is substantially the same as the existing
franchise that the franchisee is operating; and
79
80
81
Paul D. Jones & Daniel F. So, "Houdini's Franchise Law: Exclusions and Exemptions to
Disclosure in Canada," (Paper presented to the Ontario Bar Association's 6th Annual
Franchising Conference: The Domino Effect, November 2006) [OBA Continuing Legal
Education: Toronto, 2006] at 25.
Manitoba Law Reform Commission, supra note 14 at 51.
R.S.A. 2000, c. F-23, s. 5.