Franchise Law - ONSCDC

The plaintiff, a pizza delivery driver, brought a proposed class action against the franchisor and 141 franchisees alleging misclassification as an independent contractor.

Both the plaintiff and the franchisee defendants appealed the certification judge's decision.

The Divisional Court dismissed the plaintiff's appeal, upholding the finding that the franchisees were not 'common employers' under the Employment Standards Act.

The Court granted the franchisees' appeal in part, finding the motion judge erred in certifying a conspiracy claim among all defendants because the pleadings only alleged the franchisor controlled the agreements, not that the franchisees conspired with each other.

The certification of employment status as a common issue and the negligence claim were upheld.

The plaintiff and the franchisee defendants brought motions for leave to appeal the decision of Glustein J. dated December 17, 2024.

The Divisional Court granted both motions for leave to appeal.

Costs of the motions were fixed at $5,000 each and reserved to the panel hearing the appeal.

The appellant franchisee appealed a motion judge's decision denying an interlocutory injunction to prevent the termination of its franchise agreement.

The Divisional Court allowed the appeal, finding the motion judge's two-paragraph reasons were insufficient to permit meaningful appellate review as they failed to address the renewal clause, the factual disputes, or the RJR-MacDonald test.

The Court declined to decide the injunction on the merits, remitting it to a different judge.

The Court also held that the franchisor's undertaking not to terminate the agreement pending the determination of the injunction motion remained binding through the appeal process.

The appellant franchisor appealed a Master's order staying its application for declarations regarding the termination of a franchise agreement.

The Master had concluded that Ontario lacked jurisdiction or, alternatively, that Saskatchewan was the clearly more appropriate forum.

The Divisional Court upheld the Master's decision, finding no palpable and overriding error in the factual findings regarding the franchisor's regional office in Saskatchewan.

The court also affirmed that the territorial connection to Ontario was weak, as the conduct underlying the dispute occurred in Saskatchewan, where the respondents operated the franchise.

The appeal was dismissed.

The plaintiff, a former franchisee, sued the franchisor for failing to renew its lease.

The defendants brought a motion for security for costs under Rule 56.01(1)(d), which was granted by the motions judge.

The plaintiff appealed to the Divisional Court, arguing that the defendants had unreasonably delayed in bringing the motion and that the order would stifle a valid claim.

The Divisional Court allowed the appeal, finding that the defendants had good reason to believe the plaintiff had insufficient assets years before bringing the motion, and that the motions judge failed to appreciate the evidence of delay.

The order for security for costs was set aside.

The plaintiff brought a motion for leave to appeal an order requiring it to pay $175,000 into court as security for costs.

The underlying action involved a claim for damages for breach of a franchise agreement.

The motions judge had found that the plaintiff failed to establish impecuniosity.

The Divisional Court granted leave to appeal, finding good reason to doubt the correctness of the order and that the issue of whether the merits of the case should be considered even if impecuniosity is not established transcends the interests of the parties and involves conflicting decisions.

The defendant franchisor appealed an order certifying a class proceeding brought by franchisees regarding the distribution of rebates and allowances under a standard form franchise agreement.

The franchisor argued that the representative plaintiffs could not fairly and adequately represent the class and had a conflict of interest because they were not indebted to the franchisor, unlike other franchisees.

The Divisional Court dismissed the appeal, finding no palpable and overriding error in the motion judge's conclusion that the representative plaintiffs could fairly and adequately represent the class and that their lack of indebtedness did not create a conflict of interest on the common issues.

The plaintiffs brought a motion to expedite the hearing of the defendant's appeal from an order certifying the action as a class proceeding.

The defendant opposed the motion, arguing that the appeal involved complex issues and that the proposed timeline was too short.

The court found that there were good grounds to expedite the appeal to prevent delay in the ongoing action and to address the vulnerability of the plaintiff franchisees.

The motion was granted, and the appeal was scheduled for the first available two-day period.

The defendant franchisor moved for leave to appeal an order certifying a class proceeding brought by franchisees regarding the withholding of rebates.

The defendant argued that the proposed representative plaintiffs had a conflict of interest with other class members who had different economic arrangements with the franchisor and feared disruption of their businesses.

The court granted leave to appeal, finding that the issue of whether the representative plaintiffs could fairly and adequately represent the class without conflict was open to serious debate and of general importance to the development of class action law.