Arthur Wishart Act (Franchise Disclosure), 2000

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Sections32

• 1Definitions

  1 (1) In this Act, “disclosure document” means the disclosure document required by section 5; (“document d’information”) “franchise” means a right to engage in a business where the franchisee is required by contract or otherwise to make a payment or continuing payments, whether direct or indirect, or a commitment to make such payment or payments, to the franchisor, or the franchisor’s associate, in the course of operating the business or as a condition of acquiring the franchise or commencing operations and, (a) in which, (i) the franchisor grants the franchisee the right to sell, offer for sale or distribute goods or services that are substantially associated with a trade-mark, trade name, logo or advertising or other commercial symbol that is owned by or licensed to the franchisor or the franchisor’s associate, and (ii) the franchisor or the franchisor’s associate has the right to exer…

• 1.
• 2Application

  2 (1) This Act applies with respect to a franchise agreement entered into on or after the coming into force of this section, with respect to a renewal or extension of a franchise agreement entered into before or after the coming into force of this section and with respect to a business operated under such an agreement, renewal or extension if the business operated by the franchisee under the franchise agreement or its renewal or extension is to be operated partly or wholly in Ontario. 2000, c. 3, s. 2 (1). Same (2) Sections 3 and 4, clause 5 (7) (d) and sections 9, 11 and 12 apply with respect to a franchise agreement entered into before the coming into force of this section, and with respect to a business operated under such agreement, if the business operated by the franchisee under the franchise agreement is operated or is to be operated partly or wholly in Ontario. 2000, c. 3, s. 2 (…

• 2.
• 3Fair dealing

  3 (1) Every franchise agreement imposes on each party a duty of fair dealing in its performance and enforcement. 2000, c. 3, s. 3 (1). Right of action (2) A party to a franchise agreement has a right of action for damages against another party to the franchise agreement who breaches the duty of fair dealing in the performance or enforcement of the franchise agreement. 2000, c. 3, s. 3 (2). Interpretation (3) For the purpose of this section, the duty of fair dealing includes the duty to act in good faith and in accordance with reasonable commercial standards. 2000, c. 3, s. 3 (3).

• 3.
• 4Right to associate

  4 (1) A franchisee may associate with other franchisees and may form or join an organization of franchisees. 2000, c. 3, s. 4 (1). Franchisor may not prohibit association (2) A franchisor and a franchisor’s associate shall not interfere with, prohibit or restrict, by contract or otherwise, a franchisee from forming or joining an organization of franchisees or from associating with other franchisees. 2000, c. 3, s. 4 (2). Same (3) A franchisor and franchisor’s associate shall not, directly or indirectly, penalize, attempt to penalize or threaten to penalize a franchisee for exercising any right under this section. 2000, c. 3, s. 4 (3). Provisions void (4) Any provision in a franchise agreement or other agreement relating to a franchise which purports to interfere with, prohibit or restrict a franchisee from exercising any right under this section is void. 2000, c. 3, s. 4 (4). Right of ac…

• 4.
• 5Franchisor’s obligation to disclose

  5 (1) A franchisor shall provide a prospective franchisee with a disclosure document and the prospective franchisee shall receive the disclosure document not less than 14 days before the earlier of, (a) the signing by the prospective franchisee of the franchise agreement or any other agreement relating to the franchise, other than an agreement described in subsection (1.1); and (b) the payment of any consideration by or on behalf of the prospective franchisee to the franchisor or franchisor’s associate relating to the franchise, excluding the payment of a deposit if it, (i) does not exceed the prescribed amount, (ii) is refundable without any deductions, and (iii) is given under an agreement that in no way binds the prospective franchisee to enter into a franchise agreement. 2000, c. 3, s. 5 (1); 2017, c. 20, Sched. 9, s. 3 (1). Exception (1.1) Clauses (1) (a) and (5) (a) do not apply to…

• 5.
• 6Rescission for late disclosure

  6 (1) A franchisee may rescind the franchise agreement, without penalty or obligation, no later than 60 days after receiving the disclosure document, if the franchisor failed to provide the disclosure document or a statement of material change within the time required by section 5 or if the contents of the disclosure document did not meet the requirements of section 5. 2000, c. 3, s. 6 (1). Rescission for no disclosure (2) A franchisee may rescind the franchise agreement, without penalty or obligation, no later than two years after entering into the franchise agreement if the franchisor never provided the disclosure document. 2000, c. 3, s. 6 (2). Notice of rescission (3) Notice of rescission shall be in writing and shall be delivered to the franchisor, personally, by registered mail, by fax or by any other prescribed method, at the franchisor’s address for service or to any other person…

• 6.
• 7Damages for misrepresentation, failure to disclose

  7 (1) If a franchisee suffers a loss because of a misrepresentation contained in the disclosure document or in a statement of a material change or as a result of the franchisor’s failure to comply in any way with section 5, the franchisee has a right of action for damages against, (a) the franchisor; (b) the franchisor’s agent; (c) the franchisor’s broker, being a person other than the franchisor, franchisor’s associate, franchisor’s agent or franchisee, who grants, markets or otherwise offers to grant a franchise, or who arranges for the grant of a franchise; (d) the franchisor’s associate; and (e) every person who signed the disclosure document or statement of material change. 2000, c. 3, s. 7 (1). Deemed reliance on misrepresentation (2) If a disclosure document or statement of material change contains a misrepresentation, a franchisee who acquired a franchise to which the disclosure …

• 7.
• 8Joint and several liability

  8 (1) All or any one or more of the parties to a franchise agreement who are found to be liable in an action under subsection 3 (2) or who accept liability with respect to an action brought under that subsection are jointly and severally liable. 2000, c. 3, s. 8 (1). Same (2) All or any one or more of a franchisor or franchisor’s associates who are found to be liable in an action under subsection 4 (5) or who accept liability with respect to an action brought under that subsection are jointly and severally liable. 2000, c. 3, s. 8 (2). Same (3) All or any one or more of the persons specified in subsection 7 (1) who are found to be liable in an action under that subsection or who accept liability with respect to an action brought under that subsection are jointly and severally liable. 2000, c. 3, s. 8 (3).

• 8.
• 9No derogation of other rights

  9 The rights conferred by this Act are in addition to and do not derogate from any other right or remedy a franchisee or franchisor may have at law. 2000, c. 3, s. 9.

• 9.
• 10Attempt to affect jurisdiction void

  10 Any provision in a franchise agreement purporting to restrict the application of the law of Ontario or to restrict jurisdiction or venue to a forum outside Ontario is void with respect to a claim otherwise enforceable under this Act in Ontario. 2000, c. 3, s. 10.

• 10.
• 11Rights cannot be waived

  11 Any purported waiver or release by a franchisee of a right given under this Act or of an obligation or requirement imposed on a franchisor or franchisor’s associate by or under this Act is void. 2000, c. 3, s. 11.

• 11.
• 12Burden of proof

  12 In any proceeding under this Act, the burden of proving an exemption or an exclusion from a requirement or provision is on the person claiming it. 2000, c. 3, s. 12.

• 12.
• 13Exemption

  13 (1) Repealed: 2000, c. 3, s. 13 (7). Same (2) If a franchisor meets the criteria prescribed for the purpose of this subsection, the Lieutenant Governor in Council may, by regulation, exempt the franchisor from the requirement to include specified financial information in a disclosure document, subject to the terms and conditions set out in the exempting regulation. 2000, c. 3, s. 13 (2). General or specific (3) A regulation made under this section may be general or specific in its application. 2000, c. 3, s. 13 (3). Revocation of exemption (4) A regulation made under this section may be revoked if the franchisor no longer meets the prescribed criteria or if the franchisor asks that the exemption be revoked. 2000, c. 3, s. 13 (4). Statutory Powers Procedure Act does not apply (5) The Statutory Powers Procedure Act does not apply to a decision under this section to grant or to refuse to…

• 13.
• 14Regulations

  14 (1) The Lieutenant Governor in Council may make regulations, (a) defining co-operative association for the purpose of paragraph 3 of subsection 2 (3); (a.1) prescribing an amount for the purpose of subclause 5 (1) (b) (i) or (5) (b) (i); (b) prescribing types of changes that constitute a material change; (c) prescribing material facts for the purpose of clause 5 (4) (a); (d) prescribing the financial statements to be included in the disclosure document; (e) prescribing statements for the purpose of clause 5 (4) (d); (f) prescribing other information and copies of documents to be included in the disclosure document; (f.1) prescribing the information to be included in a statement of material change for the purpose of subsection 5 (5.1); (g) prescribing a percentage of sales for the purpose of clause 5 (7) (e); (h) prescribing a manner or an amount for the purpose of subclause 5 (7) (g) …

• 14.
• 15

  15 Omitted (provides for coming into force of provisions of this Act). 2000, c. 3, s. 15.

• 15.
• 16

  16 Omitted (enacts short title of this Act). 2000, c. 3, s. 16. ____________________________

• 16.