Underneath the Golden Boy - Robson Hall Faculty of Law

338 Underneath the Golden Boy
in Manitoba. 149 Therefore, if there is a need for a regulator in Manitoba, it is
certainly not as imminent as in Ontario.
Second, Manitoba has not had the chance to determine what effect
franchise legislation will have on the franchise community. Given its unique size,
perhaps the issue of improper disclosure will also be in a relatively small scale
and thus be solved more easily than in Ontario. It may be wise to wait until after
franchise legislation is introduced to assess the true need of a regulator in
Manitoba. Thus, the necessity for a regulator has yet to arise in Manitoba.
Although Manitoba may not need a regulator, it does not mean that the
situation should be ignored until so much abuse takes place that one is needed.
To avoid such a situation, the provincial government may want to prepare an
instructional pamphlet directing franchisees to different resources they can
employ to become better informed prior to purchasing a franchise. This would be
very similar to the CFA’s approach of providing its members with the
opportunity to educate themselves. It would then become a franchisor’s
responsibility to attach the pamphlet to the disclosure documents. In doing so,
Manitoba would be following the advice of those who oppose the introduction of
a regulatory body while still leaving the possibility of introducing one if need be.
Overall, it is too premature for Manitoba to adopt a regulatory body to
overlook franchise disclosure. Instead, it should be the Province’s aim to educate
franchisees to make well-informed decisions, allowing them to detect franchisors
whose intentions may be ill-conceived.
H. Alternative Dispute Resolution
In the franchise industry in particular, the use of ADR is growing in marked
popularity. From a franchisor’s perspective, this is due to the disclosure
requirements of franchise legislation, which requires franchisors to provide
details concerning litigation commenced against them, or pending litigation
against them. A disclosure document that contains numerous lawsuits
commenced against the franchisor may dissuade prospective franchisees from
acquiring the franchise. Consequently, franchisors have commenced to utilize
mandatory arbitration or ADR clauses in their franchise agreements, mandating
that disputes must first be resolved through ADR instead of through litigation,
with the goal of having a smaller number of disputes to disclose. 150 In doing so,
the franchise may appear more appealing to a prospective franchisee.
149
Please refer to the following articles: Alexandra Paul, supra note 11; Paul Turenne, supra note
11.
150
Daniel F. So, supra note 69 at 266.