A franchisee brought an action against the franchisor alleging failure to disclose material information under the Arthur Wishart Act in connection with a renewal of a franchise agreement and the franchisor’s requirement that the franchisee undertake costly renovations to convert its store to a sit‑down restaurant.
The franchisee claimed the renovations constituted a material change requiring disclosure and alleged breaches of good faith, damages for loss of the business, and lost profits.
The court held that the renovation program had been disclosed and known to the franchisee since before the original franchise agreement and therefore did not constitute a material change at renewal within the meaning of the Arthur Wishart Act.
The court further found the franchisor acted in good faith and made multiple reasonable accommodations and offers to the franchisee.
In any event, the franchisee failed to mitigate its damages by refusing to return to operate the store for the remaining term of the agreement.
The action was dismissed.
