Underneath the Golden Boy - Robson Hall Faculty of Law

Response to Consultation Paper on Franchise Law 335
Pizza Ltd. 130 drew the public’s focus to the need for franchise legislation, a new
series of cases is currently directing Ontario’s franchise community to consider
introducing franchise regulators.
The Toronto Star has recently focused on the 3 for 1 Pizza & Wings
litigation as the basis for proposing the appointment of some kind of franchise
regulator for the province. 131 The question facing Manitoba is the same. In
introducing franchise legislation, should Manitoba implement a franchise
regulatory body
Although a regulatory office could be structured in a number of ways, 132 its
functions would not vary. A regulator would review the quality of disclosure
given to franchisees, provide an inexpensive system to resolve disputes, rules to
govern contractual relationships and penalties for breaking franchise law. 133 Ben
Hanuka, chairman of the joint subcommittee on franchising for the Ontario Bar
Association, supports the introduction of a regulatory body. He argues that some
franchisors do not give out proper disclosure, and franchisees who have already
invested a life’s savings are having to spend much money to enforce their rights
under franchise law. He further states:
[W]e should upgrade the teeth of the statute, and bring in a regulatory body to deal with
the situation where there is an utter breach of providing a disclosure document.[…]
People should not be forced to locate a franchise lawyer and litigate this, but should have
the benefit of a regulatory body. 134
Such a tribunal would save franchisees millions of dollars in legal fees, 135
allowing them to pursue their rights even after being abused by unscrupulous
franchisors. A regulator should not only go after rogue franchisors, and require
them to post a bond to compensate potential victims, and ensure access to
justice, but also protect compliant franchisors from rogue franchisees. 136 Such a
body would not be unique to Canada, as the United States has already
implemented it through the Federal Trade Commission.
130
23 B.L.R. (2d) 239, 23 C.P.C. (3d) 323.
131
Peter Macrae Dillon, “Ontario Franchise Developments in 2005: Welcome to the ‘Tween
Years,” (Paper Presented to The Six Minute Business Lawyer, The Law Society of Upper
Canada June 2006) online: Siskinds Resources, Articles of Interest
at 1.
132
Manitoba Law Reform Commission, supra note 13 at 54.
133
James Daw, “Regulator Could Help Franchise Feuds: Province Awaiting Report form
Committee,” The Toronto Star, (March 16, 2006), online: Toronto Star Online
.
134
Ibid.
135
Ibid.
136
Ibid.