From the desk of:

David Kornhauser

David Kornhauser

Franchisor “Squeezed” for Rescission Damages Arising from Improper Disclosure

Introduction

In 2611707 Ontario Inc. et al v Freshly Squeezed Franchise Juice Corporation, et al., 2021 ONSC 2323 (“Freshly Squeezed”), the Court provided further guidance on the level of detail that franchisors are required to include in a disclosure document provided to prospective franchisees pursuant to section 5(1) of the Arthur Wishart Act (Franchise Disclosure), 2000, S.O. 2000, c.3 (“Act”).

Pursuant to section 6(2) of the Act, a franchisee can rescind their franchise agreement within two years, if the franchisor failed to provide the prospective franchisee a disclosure document.

As the case law has articulated, the failure to provide includes circumstances in which the disclosure document was so deficient that it was tantamount to there being no disclosure document thereby impairing the franchisee’s ability to make an informed investment decision.

This article was originally published in the Toronto Law Journal, published by The Toronto Lawyer’s Association. Please visit the Toronto Law Journal online to access the complete article. 

This article was co-written with the assistance of Mariette Niranjanan (BA, MPA, JD), Student at Law.

This article is not intended to serve as a comprehensive treatment of the topic and is not legal advice. All legal matters are dealt with pursuant to their specific facts and circumstance. Nothing replaces retaining a qualified, competent lawyer.