Opening a franchise business has multiple advantages over other business types. A franchisee gets more of the freedom of an independent business but more of the support and built-in customer base of a chain store or business. Owners of the entire franchise, franchisors, get a diversified revenue stream and owners at each location with a vested interest.
However, despite these advantages, there are still legal needs to consider for both franchisors and franchisees. This became even more relevant after the introduction of The Arthur Wishart Act (Franchise Disclosure) 2000.
With the advent of this act, the obligations of franchisors were expanded and the rights of franchisees clarified. As such, franchise legislation and franchise litigation are no longer framed as a simple breach of contract. It now contains statutory and regulatory aspects as well.
The Arthur Wishart Act was largely created to protect franchisees who may not be fully aware of what owning a franchise location involves. It makes it the responsibility of a franchisor to provide specific information to a potential franchisee to help them make a more informed decision.
This disclosure document is required to contain a wide range of material facts including financial statements. If a franchisor fails to provide the disclosure document, omits required information or if any information is vague, the franchisee may be allowed to back out of the franchisee agreement.
Devry Smith Frank LLP’s (DSF) Franchise litigation lawyer group regularly acts for both franchisors and franchisees. Having worked on both sides of franchise law, we have honed our skills to get a complete and well-rounded view of the personal and legal needs of each of our clients.
We are able to provide representation and counsel on multiple areas of franchise litigation, including:
DSF provides a mid-market alternative for franchisors and franchisees pursuing franchise litigation. Our reputation for being approachable, professional and practical have made us a top choice for a wide range of Toronto business owners. Our practitioners have provided advice and counsel to all parties in the franchise and distribution system from start-up franchisees to international franchisors and distributors for numerous products and services.