The appellant franchisors appealed a trial judgment granting the respondent franchisees rescission of their franchise agreement and damages under the Arthur Wishart Act.
The franchisors argued they had substantively complied with disclosure requirements by providing information piecemeal over several months.
The Court of Appeal dismissed the appeal, holding that the Act strictly requires disclosure in a single document delivered at one time.
The Court also found that the franchisees did not affirm the contract by continuing to operate the business briefly to mitigate losses after serving the notice of rescission, as statutory rescission operates differently from equitable rescission.