Underneath the Golden Boy - Robson Hall Faculty of Law

292 Underneath the Golden Boy
Resources Institute for Dispute Resolution 242 and is non-binding and voluntary,
although franchisors are asked to join for a minimum two year period.
The Ontario and PEI regulations require a franchisor’s disclosure document
to describe any alternative dispute process used or imposed by the franchisor. In
Ontario, the document must also include a statement that any party may
propose an alternative dispute resolution process, which may be used if agreed to
by all parties. The ULCC Model Bill and the New Brunswick Bill contain
provisions allowing one party to a franchise agreement to deliver a notice to the
other party requiring the mediation of a dispute. According to the ULCC
Working Group,
The Committee considered at great length whether franchise disputes would be resolved
more advantageously through a form of alternative dispute resolution. Recognizing that in
certain provinces the rules of practice in civil proceedings mandate a form of pre-trial
mediation, and recognizing that the Ontario Act contains a mandatory disclosure
statement that mediation is a form of dispute resolution, the Committee determined that
it would be beneficial to provide for mediation to be invoked by any party to a franchise
agreement.
The Committee believes based on its own experiences and those brought to the attention
of the Committee that party initiated mediation will be of significant benefit to resolve
franchise disputes prior to the commencement of, as well as after the commencement of,
litigation proceedings.
The mediation rules are to be set out by regulation. The mediation
procedure does not preclude subsequent proceedings in relation to the dispute
before a court, tribunal, or arbitrator.
CONCLUSION
Franchising is an important and growing component of the Canadian economy,
and Manitoba is no exception. The franchise concept is appealing to many
prospective business owners, offering a model for business success accompanied
by ongoing support. However, franchising is not risk-free, and there is a trend in
other jurisdictions toward regulating franchising, to require franchisors to
provide significant disclosure to prospective franchisees, and in some cases, to
regulate more extensively the ongoing relationship.
This paper has provided an overview of franchising regulation, and the
Manitoba Law Reform Commission invites your comments on the issues and
242
See the Center for Public Resources website at
(date accessed: May 12,
2007). The CPR reports a success rate of approximately 80% in cases in which the franchisee
agreed to participate, and in which a mediator was needed. Additional disputes were resolved
before requiring a mediator.