UTGB Vol 5.pdf - Robson Hall Faculty of Law

94 Underneath the Golden Boy
Section 5(1) of the Arthur Wishart Act (Franchise Disclosure), 2000, requires a
franchisor to provide a prospective franchisee with a disclosure document and s.
5(4) sets its contents. According to the latter section, the disclosure document
shall contain "all material facts." Since the Ontario Act employs the same
definition of "material facts" as the ULCC, the primary difference between the
two is the disclosure required by the regulations of each. As a Eide note, since
Ontario and the ULCC have adopted the same definition of "material facts," it
would be prudent that Manitoba consider including it in its own legislation.
The Regulation Made Under the Arthur Wishart Act (Franchise Disclosure), 2000,
Part II, sets out a list of elements, divided into seven sections, that must be
included in a disclosure document. The Ontario Act and the ULCC's UFA are
very similar, with the latter requiring disclosure in greater detail. This is because
the ULCC's approach in drafting its UFA was to consider the Ontario
legislation as a working model, inserting changes and modifications considered
appropriate for both clarity, inclusionary and consistency purposes. 41 Therefore,
if Manitoba were to adopt the ULCC disclosure requirements, it would
implement a more detailed version than Ontario's.
A clear example of the difference in drafting between the two is the disclosure
requirement with regard to training. Whereas s. 6(5) of the Ontario regulations
requires "a description of any training or other assistance offered to the
franchisee by the franchisor or the franchisor's associate, including whether the
training is mandatory or optionat and if the training is mandatory, a statement
specifying who bears the cost of training," s. 4(1) (h) of the UFA adds that the
franchisor must also disclose where the training or other assistance will take
place. This is just one of many examples showing how the ULCC has drafted
more detailed legislation than Ontario while using the latter as a model. This is
an important point to consider.
Peter Macrae Dillon, a prolific author and head of Siskinds' Franchise,
Licensing and Distribution Tearn in London, Ontario, states, "Unfortunately,
the ULCC chose to uphold and reinforce the Ontario Act as the gold standard
of franchise legislation." 42 Mr. Dillon refers to the ULCC's choice as
"unfortunate" on the grounds that Ontario has the world's toughest disclosure
standard. What makes the Ontario Act, and consequently the UFA, so tough is
that it has a p1rely open,ended disclosure model. As a result, the failure of a
franchisor to include any fact that might be found to be material in the
41
42
Uniform Law Conference of Canada, Uniform Franchises Act Report - August 2004, online:
Proceedings of Annual Meetings, Report of the Uniform Franchise Act Working Group
at 1.
Peter Macrae Dillon, "Will Franchising Survive as a Business Model Under Canadian Laws
and Regulations" (Summer 2006) 26:1 Franchise Law journal 32 at 32.