UTGB Vol 5.pdf - Robson Hall Faculty of Law

106 Underneath the Golden Boy
• There has been no material change since the existing franchise
agreement or latest renewal or extension of the existing franchise
agreement.
In such a case, the franchisee would already posses all the required information
to make the purchase, hence the exemption.
When drafting an exemptions section for Manitoba, the differences between
Alberta and Ontario should be noted. For instance, Ontario does not have an
equivalent of Alberta's s. 5(1)(g). The section creates an exemption from
disclosure when the sale is of a right to a person to sell goods or services within
or adjacent to a retail establishment as a department or division of the
establishment, if the person is not required to purchase goods or services from
the operator of the retail establishment More importantly, Alberta has
incorporated one further exemption by allowing the Minister to exempt any
person or franchise from any or all provisions of the Act or regulations upon
becoming satisfied that to do so would not be prejudicial to the public interest. 82
This is an important difference because it allows the Minister to create further
exemptions upon application where the occasion so warrants.
Manitoba should follow Alberta's example and adopt its exemptions section.
Not only is the section more extensive but also it contains the further
exemption that allows a Minister to grant an exemption where to do so would
not be prejudicial to the public interest. In keeping with the act's purpose of aiding
the franchisee to make an informed decision, an exemption will still allow the
franchisee to do so while fostering expediency.
2. Exemption from Franchisor's Obligation to Provide Financial
Statements
Financial disclosure is a very sensitive topic. Consequently, most franchisors are
wary of disclosing sensitive financial information in the form of financial
statements required to be provided as part of a disclosure document. The
general requirement to disclose financial information about the franchisor is to
inform the prospective franchisee of the financial health and success of their
prospective franchisor. The provisions in Alberta, P.E.I. and Ontario providing
franchisors with an exemption from disclosing financial statements were
intended to provide mature, established and financially viable franchisors that
have a consistent record of good relations with franchisees and who comply
with the law from having to disclose financial information to prospective
franchisees, or where to so exempt would not prejudice the public interest. 83 In
order to better understand the financial document disclosure exemption, it is
necessary to consider the actual provisions.
82
S.A. 1995 c. F#l7.1, s. 6.
83
Zaid, supra note 67 at 34-35.