So Ontario, Canada is a worldwide franchise industry outcast? Okay then…

Peter Dillon of Siskinds LLP is an expert in franchise law and a practicing franchise lawyer.

In this month’s  edition of Canadian Lawyer magazine an article entitled Ontario courts side with franchisees, Mr Dillon is quoted as believing:

…franchise law and its judicial interpretation by the courts of Ontario has created probably the most perilous jurisdiction in the world in which to conduct franchises,”

The Wishart Act and its appeal court justices have created the “most perilous jurisdiction in the world“?

Mr. Dillon is reported as having sent out this warning:

He concludes his memorandum by advising his franchisor clients that the courts have clearly demonstrated they are favouring the franchisees, which therefore “creates a high degree of risk and uncertainty that will put some franchisors out of business and will deter many others from commencing to do business through franchising.”

Taking it further, he’s quoted as having:

…spoken to many U.S.-based franchises “that want nothing to do with Ontario. In an era where franchising plays a large part in our retail economic engine, it’s a shame to have mechanics at work that seem bent on lowering the horsepower or spiking the engine altogether.”

These are not the first unsubstantiated claims made in rejection of even the most tepid legal franchisee protection provisions nor will they be the last.

Just simply the next new article I added to the WikidFranchise collection.

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2 Responses to So Ontario, Canada is a worldwide franchise industry outcast? Okay then…

  1. Carol Cross says:

    Just confirms that the legal profession wants NO CHANGES in the status quo of the sale of franchises to the public. They want the courts to continue to support the premise that the franchisors have no duty of good faith in their dealings with their franchisees unless the good faith is spelled out in the binding, non-negotiated, take-it-or-leave it- agreement prepared by the franchisors’ attorneys.

    Any new law that deals with NON-DISCLOSURE OF MATERIAL facts to new buyers by the franchisor is especially frightening.

    While the Ontario Franchise Rule may be “tepid” it is a crack in the wall of franchise law that frightens the attorneys because any true disclosure of the risk in buying a franchise would slow the sale of franchises and lessen litigation.

    The “Retail ECONOMIC ENGINE” appears to depend upon the cheap labor and cheap “venture capital” of uninfornmed buyers of franchises whose assets can be churned in both success and failure to always feed the bottom lines of the franchisors and their attorneys.

  2. Les Stewart says:

    Carol,

    Thanks for the comments. Peter was accurate in comparing franchising to a machine or a technology.

    Without some study, the conventional wisdom misleads many new investors.

    Les

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