Underneath the Golden Boy - Robson Hall Faculty of Law

Franchise Law Consultation Paper 2007 257
The Ontario Act differs slightly in that it refers to a ‘service mark’ as well as
a trade-mark, 118 and the Alberta Act is slightly narrower in scope. According to
the ULCC Uniform Franchises Act Working Group, “an inclusive definition of
franchise was chosen in order to capture a wide range of relationships subject to
requirements such as fair dealing but also to exempt certain others (i.e. business
opportunities or multilevel marketing) from the disclosure requirements.” 119
All Acts except Alberta’s exclude cooperative organizations from the
application of the Act; the Model Bill, the PEI Act, and the New Brunswick bill
also exclude arrangements for the purchase and sale of a reasonable amount of
goods and services at reasonable wholesale prices.
C. Pre-Sale Disclosure
Pre-sale disclosure is a key principle of the franchise statutes. Under each of the
Acts, franchisors are required to deliver a disclosure document to a prospective
franchisee at least 14 days before the franchisee enters into an agreement or pays
any money toward the franchise (in Alberta, franchisors may take a refundable
good faith deposit before providing disclosure). The franchisor must also provide
written statements of any material changes that occur before the agreement is
signed or any money paid.
The Acts set out the required contents of the disclosure documents, but
most of the details are to be set out regulation. The Acts require:
• the franchisor’s financial statements as prescribed by regulation,
• copies of all proposed agreements,
• statements as prescribed by regulation to assist the prospective
franchisee to make an informed investment decision, and
• other information and documents as prescribed by regulation.
118
It has been suggested that, since there is no concept of a ‘service mark’ in the Trade-marks Act,
R.S., 1985, c. T-13, the presence of this term “is an indicator of the degree [of] American
influence in the drafting of the Canadian statutes”, P.D. Jones and D.F. So, “Houdini’s
Franchise Law: Exclusions and Exemptions to Disclosure in Canada” (Paper presented to The
Domino Effect: 6 th Annual Franchising Conference, Ontario Bar Association, November 16,
2006) at 20.
119
ULCC Uniform Franchises Act Working Group, Uniform Franchises Act with Commentary at
2, online:
(date accessed: May 9, 2007). The definition may capture organizations that did not
previously identify themselves as a ‘franchise’: see P.M. Dillon, “Ontario Franchise
Developments in 2004: Has the Pendulum Finished Swinging Yet” Siskinds Collection of
Franchise Law Articles (FRAN/RP-016, June 15, 2005), QL and R. Glass, P. Dillon and M.
Robinson, “Accidental Franchises: If It Walks Like a Duck and Quacks Like a Duck…”
Siskinds Collection of Franchise Law Articles (FRAN/RP-014, December 15, 2004), QL.