The defendant franchisor brought a motion for summary judgment dismissing the franchisees’ action on the basis of a mutual release signed following the failure of the franchised restaurant, and alternatively sought partial summary judgment dismissing a statutory rescission claim under the Arthur Wishart Act (Franchise Disclosure), 2000.
The plaintiffs argued the release was unenforceable due to unconscionability and statutory invalidity, and that disclosure deficiencies entitled them to rescind within the two‑year period applicable where no compliant disclosure document is provided.
The court held that genuine issues requiring a trial existed regarding the enforceability of the mutual release, including potential unconscionability, lack of legal advice, and imbalance of bargaining power.
The court also found that determining whether the disclosure requirements were satisfied under the statute required a full evidentiary record and could not be resolved on summary judgment.
However, the court struck the plaintiffs’ jury notice based on the contractual waiver and the equitable nature of certain relief sought.