Franchise law is an ass?

Ontario is where one in three Canadians live. It is the home province of the petroleum, grocery and automobile head offices. There are 500 franchise systems, 40,000 franchised stores and $40-50 billion in annual sales.

The province of Alberta had the first franchise law and Ontario lagged behind with the Arthur Wishart Act (Franchise Disclosure) Act in 2000. Investors think it is not much to write home about. Two other provinces have passed laws since Wishart and they are even weaker.

In March 2000, five expert witnesses were invited to speak to the members of provincial parliament. I was one of them.

My prediction in 2000. Excerpt:

Mr Stewart: What I’m afraid of is that there we’re going to create a law that gives the illusion of a solution so that the salesman at the trade show can say: “Ah, see this law? We can’t do that any more. We can’t be unfair. You have the right.” I’m not sure if the salesman is going to also say, “But you’ll have to have $50,000 to take it to court to prove it yourself.” The onus in Bill 33, in large measure, is on the franchisee to prove damage. The franchisee is in no economic position, in most cases, to do that.

By 2008? The Wishart Act is being ignored by most everyone, the government refuses to look at strengthening and any effective franchisee advocacy has been sold down the river.

As happens sometimes, the law serves those that have the ability to influence it. It doesn’t matter what the objective truth is, the subjective truth (reality based in power) won in Ontario in 2000 and continues to win around the world.

Looking to the law for help is just as rare as finding love in a Whorehouse. Possible but mostly a fairy tale told to create false hope and billable hours.

This illusion allows franchise lawyers to attract “practice clients” (ie. franchisees: broke, one time) while waiting to land their “real” future clients (ie. franchisors: cash, repeat).

If you would like to review my entire testimony, click here for a .pdf (8 pages) or here under the Legislative Assembly of Ontario.

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