We have drafted and updated dozens
of franchise disclosure documents (under the old UFOC format and the FTC's current FDD format) and obtained state franchise registrations and exemptions in every state.
The offer of a franchise can only be made through the delivery
of a franchise disclosure document.
New York City partner and leader of the firm's Franchise & Distribution practice Craig Tractenberg authored this column on how the diligence process differs for franchisors and the role
of the franchise disclosure document.
A franchise is offered in many jurisdictions only by delivery
of a franchise disclosure document to you in compliance with applicable franchise sales laws.
Offers of franchises may only be made by delivery
of a franchise disclosure document (prospectus), and in certain states the franchise disclosure document must first have been registered with the state agency that regulates the offers and sales of franchises.
Not exact matches
ONE
of the main criticisms
of the
franchising code
of conduct is the cost
of providing
disclosure documents.
No offer or sale
of a restaurant will be made except by a
franchise disclosure document first filled and registered with applicable state authorities.
Franchisors are required to supply a
franchise disclosure document, which contains information on the backgrounds
of the executives involved in the
franchise company and other information.
He recently set new law with respect to Ontario litigation procedure, upheld on appeal new
franchise law relating to what rescission rights are available when a
disclosure document is provided by e-mail, and set new
franchise law at the intersection
of the Wishart Act and the Personal Property Security Act.
As a result, it held that AGR had not provided a
disclosure document within the meaning
of the Arthur Wishart Act (
Franchise Disclosure), 2000.
The franchisee and its individual principals argued that the restrictive covenant was unenforceable on the basis that (i) it comprised a restraint
of trade and was ambiguous, and (ii) the
disclosure document did not contain a copy
of the executed
franchise agreement.
As noted by way
of an introduction to the critical statutory
franchise rescission remedy in Ontario in a Law Works Franchise Justice Blog Post on September 8, 2013, «Terminating a Franchise Agreement: A Primer ``, if a franchisor fails to deliver a disclosure document as required under Ontario's Arthur Wishart Act (Franchise Disclosure), 2000 and its Regulation, General Ontario Regulation 581/00, a franchisee is entitled to cancel (legally «rescind») the entire purchase of the franchised business from the start of the transaction, including all franchise and related agreements, and claim a return of all his or her investment an
franchise rescission remedy in Ontario in a Law Works
Franchise Justice Blog Post on September 8, 2013, «Terminating a Franchise Agreement: A Primer ``, if a franchisor fails to deliver a disclosure document as required under Ontario's Arthur Wishart Act (Franchise Disclosure), 2000 and its Regulation, General Ontario Regulation 581/00, a franchisee is entitled to cancel (legally «rescind») the entire purchase of the franchised business from the start of the transaction, including all franchise and related agreements, and claim a return of all his or her investment an
Franchise Justice Blog Post on September 8, 2013, «Terminating a
Franchise Agreement: A Primer ``, if a franchisor fails to deliver a disclosure document as required under Ontario's Arthur Wishart Act (Franchise Disclosure), 2000 and its Regulation, General Ontario Regulation 581/00, a franchisee is entitled to cancel (legally «rescind») the entire purchase of the franchised business from the start of the transaction, including all franchise and related agreements, and claim a return of all his or her investment an
Franchise Agreement: A Primer ``, if a franchisor fails to deliver a
disclosure document as required under Ontario's Arthur Wishart Act (
Franchise Disclosure), 2000 and its Regulation, General Ontario Regulation 581/00, a franchisee is entitled to cancel (legally «rescind») the entire purchase of the franchised business from the start of the transaction, including all franchise and related agreements, and claim a return of all his or her investment an
Franchise Disclosure), 2000 and its Regulation, General Ontario Regulation 581/00, a franchisee is entitled to cancel (legally «rescind») the entire purchase
of the
franchised business from the start
of the transaction, including all
franchise and related agreements, and claim a return of all his or her investment an
franchise and related agreements, and claim a return
of all his or her investment and losses.
The answer to whether a franchisee is entitled to get out
of a
franchise agreement broadly depends on one or both
of the following conditions: whether either party broke the
franchise agreement, or, where required under provincial law, whether the franchisor failed to deliver a
franchise disclosure document.
MGDC and its affiliates claimed that their arrangement with Authentic Brands Group LLC was itself a «
franchise agreement» under Ontario's Arthur Wishart Act (Franchise Disclosure), 2000, and that they were entitled to a rescission (cancellation) of the arrangement because they had not been provided with a franchise disclosure
franchise agreement» under Ontario's Arthur Wishart Act (
Franchise Disclosure), 2000, and that they were entitled to a rescission (cancellation) of the arrangement because they had not been provided with a franchise disclosure
Franchise Disclosure), 2000, and that they were entitled to a rescission (cancellation)
of the arrangement because they had not been provided with a
franchise disclosure
franchise disclosure document.
Cases that are helping to clarify Ontario's
franchising legislation include a pro-franchisor Superior Court ruling that a decision to wind down GM dealerships did not call for a new set
of disclosure documents (Trillium Motor World Inc. v. General Motors
of Canada Limited), and a second case involving the auto giant (Addison Chevrolet Buick GMC Ltd. v. General Motors
of Canada Ltd), where courts have declined to dismiss an argument from franchisees that GM's U.S. parent company should share liability.
First, in the analysis
of whether a franchisor is exempt from providing a
franchise disclosure document in a renewal, the court needs evidence, and it must be conclusive, about the material differences between the original and then - current
franchise agreements and their factual context.
This is an influential Ontario court decision under the Arthur Wishart Act (
Franchise Disclosure), 2000, on the issue
of what constitutes a materially deficient
disclosure document.