The franchisor brought a motion for partial summary judgment seeking dismissal of the franchisees’ counterclaim for rescission under s. 6(2) of the Arthur Wishart Act (Franchise Disclosure), 2000.
The franchisees alleged the disclosure document failed to disclose several material facts, including litigation involving the franchisor, anticipated policy changes, and potential renovation costs.
The court held that three of the alleged omissions were not material facts because they arose well after the disclosure document was delivered or could not reasonably affect the franchise price.
Although the existence of contemplated litigation should have been disclosed, the deficiency was not so stark or fundamental as to amount to no disclosure at all.
Accordingly, the franchisees could not rely on the two‑year rescission remedy under s. 6(2), and the rescission counterclaim was dismissed.
