Underneath the Golden Boy - Robson Hall Faculty of Law

Response to Consultation Paper on Franchise Law 299
the following will consider articles and Legislative Assembly discussions to
determine what factors influenced the province to introduce such legislation.
Ontario first addressed the idea of introducing franchise legislation with the
Grange Report recommendations of 1971. 17 However, no act would come to
fruition until the much-publicized Pizza Pizza case, 887574 Ontario Inc. v. Pizza
Pizza Ltd. (1995), 18 demonstrated that franchisees were in dire need of
protection. A new committee was formed and given the name Franchise Sector
Working Team (“FSWT”). The FSWT delivered its report in 1995. Although
the report was not conclusive on several issues, the members of the FSWT
agreed that disclosure from franchisors to potential franchisees before a franchise
was purchased was necessary. Three years after this report, the Ontario
government published a consultation paper on proposed franchise disclosure
legislation. This led to the introduction of Bill 93, which died on the order paper
and was subsequently reintroduced as Bill 33. The latter passed its first reading
in 1999 and received royal assent 8 June 2000. 19 This process sparked much
legislative debate in support of franchise legislation.
The need for franchise legislation was directly addressed during Ontario’s
Legislative Assembly meeting of 17 May 2000, while Bill 33 received its second
reading. 20 In describing the nature of the franchisor-franchisee relationship, Mr.
Tony Martin, MPP for Sault Ste. Marie, spoke of the fear that is generated when
franchisees deal with franchisors. This fear may be created when franchisees are
forced to sign contracts of adhesion, restricting their ability to manage their
business. Mr. Martin proceeded to tell a number of stories where franchisees had
been abused by franchisors.
The most shocking story Mr. Martin told was about Mary Carlucci, a
grocery store owner. In the ten years as owner, she was able to turn her store into
a very successful business, a vast improvement from what it used to be. One day,
she received a phone call from the parent company to say that there was going to
be a marketing meeting at the local hotel. While she was gone at the supposed
marketing meeting, the parent company moved in and changed the locks, took
17
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).
18
23 B.L.R. (2d) 59, [1995] O.J. No. 936 (Ont. Ct. Gen. Div.).
19
Edward N. Levitt, “Ontario Franchise Legislation,” online: Gowlings Resource Centre
.
20
Ontario, Legislative Assembly, Debates (Hansard), No. 60A (17 May 2000), at 3087 (Hon.
Gary Carr); Legislative Assembly of Ontario, “Official Records for May 17, 2000,” online:
Debates (Hansard) .