Underneath the Golden Boy - Robson Hall Faculty of Law

Response to Consultation Paper on Franchise Law 313
Time Learning Centres LLC. 62 The court noted that the 200-page UFOC did not
meet Ontario’s requirements because it did not have to be updated to reflect all
material facts as they exist on the date that it is delivered to the prospective
franchisee. Not only is it significant that the Superior Court rejected the UFOC
as proper disclosure, but also, and primarily in this instance, that the UFOC was
a 200-page document. If a wrap-around clause is added to such an extensive
document, it is quite possible that it will cease to be as clear and concise as
required by law, creating more difficulties for the franchisee.
Assuming that the majority of franchisors enter Canada through Ontario,
rather than Alberta, they will have to create a “new” disclosure document in
compliance with the Arthur Wishart Act (Franchise Disclosure), 2000. 63
Consequently, when that same franchisor comes to Manitoba from Ontario, it
will already have in its possession a Canadian disclosure document that will be
easily adaptable to meet Manitoba’s requirements. Therefore, compliance by
means of a wrap will be accomplished easily, clearly and concisely.
To accomplish the clarity requirement while using a wrap, Manitoba’s
legislation should demand that franchisors provide both an index and summary
of provisions. Doing so will allow franchisees reading the document to not only
navigate through it with great ease but also to read the addenda and body
together as one. Thus, when a franchisor decides to use a wrap, he will also have
to include an index and summary to meet the clarity requirement. The layout of
disclosure documents will be discussed later on under the heading “Additional
Suggestions.”
In conclusion, Manitoba should only adopt a wrap provision if it also adopts
the requirement that disclosure documents be clear and concise. This will ensure
that franchisees will receive documents that meet the purpose of the Act, that is,
to help them make well informed decisions. Moreover, if a franchisor foresees
that adding a wrap will not produce a clear document, they will have the option
of producing one specific for Manitoba. 64 In addition, Manitoba legislation
should enforce the application of indexes and summaries when a wrap is used,
allowing the reader to navigate through them with greater ease. At the same
time, including a wrap will allow franchisors to enter the province with their
62
[2006] CarswellOnt 4593.
63
Debi M. Sutin and Arthur J. Trebilcock, supra note 59.
64
Edward N. Levitt, “The Prince Edward Island Franchises Act: Canada’s Newest Franchise
Statute,” online: Mondaq, Canada: Franchise & Distribution @ Gowlings – November 2006
(to view article, you must become a
member of “mondaq” at no cost).