Underneath the Golden Boy - Robson Hall Faculty of Law

312 Underneath the Golden Boy
Therefore, those franchisors coming into Manitoba will either be from the
United States or other Canadian jurisdictions.
According to Edward N. Levitt, if a franchisor comes to Manitoba from a
Canadian jurisdiction with a Canadian disclosure document, a “wrap-around”
document for Manitoba makes good business sense. 57 The requirements vary
slightly from province to province, so that adding a “wrap-around” clause will
not be too costly for the franchisor or confusing to the franchisee reading it.
Conversely, there would be a concern that a large and complex disclosure
document from a foreign jurisdiction, containing a great deal of inapplicable
information for prospective franchisees would not be clear and concise. 58 This,
however, may not be the case with a disclosure document from the United
States.
Currently, most U.S. franchisors use a uniform disclosure format called the
Uniform Franchise Offering Circular or UFOC, which will become mandatory in
2008. 59 Thus, in a few years, all franchisors coming from the U.S. will have a
UFOC at their disposition. A typical UFOC contains considerably more
information than any of its Canadian counterparts. Therefore, a Canadian
franchisee will have more information at their disposal when making the
decision to purchase. The requirement that “plain English” be used and its
standardized format with clear headings will ensure that the document will be
clear and concise. 60 Therefore, if Manitoba were to adopt a “wraparound”
provision, franchisees would still get a comprehensible disclosure document and
franchisors will not have to go through the extra time and expense of composing
a new one.
In the alternative, although adding a “wrap” will make a document comply
with domestic law, the province’s extensive disclosure requirements (whether
they emulate Ontario or the ULCC) may require that a franchisor change such a
considerable portion of the body of text of the UFOC that it may be easier to
create a new one to comply with Manitoba law. 61 The Ontario Superior Court of
Justice commented on the use of a UFOC in 1518628 Ontario Inc. v. Tutor
57
Edward N. Levitt, supra note 18.
58
Ibid.
59
Manitoba Law Reform Commission, supra note 13 at 36-37.
60
Peter Macrae Dillon, “The Case for the Use of Wrap-Around Disclosure Documents in
Canada,” (Fall 2004) Vol. 24, No. 2 Franchise Law Journal 73 at 76; or online: Siskinds
Resources, Articles of Interest
at 5.
61
Debi M. Sutin and Arthur J. Trebilcock, “The Case Against the Use of Wrap-Around
Disclosure Documents in Canada,” (Fall 2004) Vol. 24, No. 2 Franchise Law Journal 83 at 83.