The moving party sought partial summary judgment rescinding a franchise agreement under s. 6(2) of the Arthur Wishart Act (Franchise Disclosure), 2000, alleging the franchisor failed to provide proper disclosure.
The respondent argued the transaction fell within the resale exemption under s. 5(7)(a)(iv), asserting the franchise was granted by an existing franchisee and not effected by or through the franchisor.
The court held that the franchisor was actively involved in effecting the grant by approving the franchisee, requiring training, structuring the lease and security arrangements, and setting the terms of the new franchise agreement.
Because the franchisor played a substantive role beyond merely consenting to the transfer, the disclosure exemption did not apply.
The franchise agreement was therefore rescinded pursuant to s. 6(2) of the Act.
