Underneath the Golden Boy - Robson Hall Faculty of Law

250 Underneath the Golden Boy
The 1995 Act represented a significant departure in approach, and
eliminated the oversight by the Alberta Securities Commission and the
relationship standards enforced by Commission policy. The Act is a disclosure
statute, and requires franchisors to provide a specified level of financial and
other material fact disclosure to prospective franchisees, but does not require
franchisor registration or document filing. The Act also includes provisions
governing the franchise relationship, imposing a duty of fair dealing and
protecting the freedom of franchisees to associate, and provides remedies for
breaches of the legislation. As well, the Act includes provisions for selfgovernment,
which had been strongly supported by the Canadian Franchise
Association 79 - the Lieutenant Governor in Council may designate one or more
bodies to govern franchising and to promote fair dealing among franchisors and
franchisees. However, a self-governing body has not been designated.
2. Ontario Arthur Wishart Act (Franchise Disclosure) 2000
Ontario became the second Canadian jurisdiction to enact franchise legislation,
the Arthur Wishart Act (Franchise Disclosure) 2000, 80 in 2000. The Act is
named for the former Ontario Minister of Financial and Commercial Affairs,
who established the first public inquiry into franchising in Canada in 1971. The
resulting Grange Report had called for franchise legislation along the lines of the
early Alberta Act, with a Franchise Bureau and Registrar. 81
Franchising disputes were brought to public attention in Ontario in the
early 1990s, when media reports highlighted the litigation between the Pizza
Pizza organization and a large number of its franchisees, who said that they were
subjected to an arbitrary cost structure and ‘feudal-style’ management. 82 In 1994,
the Ontario Government announced the formation of a Franchise Sector
Working Team, comprising representatives of franchisors, franchisees, and
government, to make recommendations on franchise regulation. The Team
recommended that the Ontario Government enact legislation generally similar
to the 1995 Alberta Act, although the franchisee representatives preferred to
include additional provisions governing the franchise relationship. The Team
79
Zaid, supra note 1 at 2-118II.
80
Arthur Wishart Act (Franchise Disclosure), 2000, S.O. 2000, c. 3 [Ontario Act].
81
S.G.M. Grange, Report of the Minister’s Committee on Referral Sales, Multi-Level Sales and
Franchises, Ontario Ministry of Financial and Commercial Affairs (1971).
82
887574 Ontario Inc. v. Pizza Pizza Ltd. (1995), 23 B.L.R (2d) 259 (Ont. Ct. Gen. Div.), leave
to appeal refused [1995] O.J. No. 1645 (Ont. C.A.); 887574 Ontario Inc. v. Pizza Pizza Ltd.
(1994), 23 B.L.R. (2d) 239 (Ont. Ct. Gen. Div.); 887574 Ontario Inc. v. Pizza Pizza Ltd.
(1995), 23 B.L.R. (2d) 250 (Ont. Ct. Gen. Div.); J. Lorinc, Opportunity Knocks: The Truth
About Canada’s Franchise Industry (1995) at 169-205; C. French, “Disputes hurt franchising’s
image”, The Globe and Mail (November 24, 1994) and Dillon, supra note 7 at 4.