Franchise Law

The appellants appealed a trial judge's decision regarding a franchise dispute.

They argued that the trial judge erred in deducting rent and related expenses under s. 6(6)(a) of the applicable Act, and in finding that a letter dated May 2, 2007, constituted a five-year franchise agreement.

The Court of Appeal dismissed the appeal, finding no error in the damages calculation and concluding that the trial judge's finding regarding the letter was reasonable and supported by the evidence.

Costs of $8,000 were awarded to the respondents.

The appellants appealed a summary judgment dismissing their proposed class action claims against a food distributor.

The appellants alleged the distributor was a 'franchisor's associate' under the Arthur Wishart Act in relation to a vending machine program run by a third party.

The Court of Appeal upheld the motion judge's finding that the distributor did not control the third party and was therefore not a franchisor's associate.

The appeal was dismissed.

The appellant franchisee appealed the dismissal of its action against the respondent franchisor for breach of the statutory duty of fair dealing under the Arthur Wishart Act.

The appellant argued that the franchisor failed to provide sufficient disclosure regarding a right of first refusal for a new restaurant location, specifically concerning the final lease terms and the size of the exclusive territory.

The Court of Appeal dismissed the appeal, upholding the trial judge's finding that the franchisor acted in good faith and in a commercially reasonable manner, and that the appellant's decision to pass on the location was an informed one based on its own financial position and lack of confidence in the landlord.

The appellant franchisees commenced a proposed class action against the respondent franchisors for breach of contract, misrepresentation, unjust enrichment, and breach of the duty of good faith.

The motion judge granted summary judgment dismissing the action, finding that the franchisor's conversion to a new donut production system and pricing requirements did not breach the franchise agreement or the duty of good faith.

The Court of Appeal upheld the decision, agreeing that the franchisor's actions were a rational business decision and that the contract did not require every new method or product to be profitable in its own right.

The appellants appealed an order dismissing their claim for statutory rescission of a franchise agreement.

The Court of Appeal agreed with the motion judge that the notice of rescission was provided more than two years after the franchise agreement was entered into, pursuant to s. 6(2).

The appeal was dismissed, as it was plain and obvious the claim could not succeed.

The appellants appealed a motion judge's decision that a restrictive covenant in a franchise agreement was not ambiguous to the point of being unenforceable as a pure question of law.

The Court of Appeal dismissed the appeal, finding that the provision was not facially ambiguous when read in the context of the entire agreement, and that any factual ambiguities would need to be determined at trial.

The appellants appealed a decision declaring the respondents were entitled to rescind a second franchise agreement due to the appellants' failure to provide a disclosure document.

The Court of Appeal upheld the application judge's findings that the matter was appropriate for an application, that the second agreement was a 'franchise agreement' under the Arthur Wishart Act triggering disclosure obligations, and that the rescission claim was not statute-barred because the limitation period only began when the franchisor disputed the notice of rescission.