Changes to Ontario’s Franchise Legislation Are Underway
Changes to Ontario’s Franchise Legislation Are Underway
Ontario’s Arthur Wishart Act (Franchise Legislation), 2000 (the “Arthur Wishart Act”) will most likely see some important changes in the coming months as a result of Bill 154, the Cutting Unnecessary Red Tape Act, 2017. Bill 154 was introduced on September 14, 2017 for the purpose of making it easier for businesses to grow and to streamline the regulatory environment within which they operate. Towards that end, Bill 154 proposes a repeal of some statutes, the enactment of new legislation, and amends several statutes, including the Arthur Wishart Act.
The proposed amendments to the Arthur Wishart Act largely reflect recommendations that the Ontario Business Law Advisory Council proposed earlier in 2016. Some of the key changes to the Arthur Wishart Act set out in Bill 154 include:
- Amending the definition of “franchise” to include relationships where the franchisor has the right to exercise control, rather than the actual exercise of control, over the franchisee’s method of operation;
- Allowing franchisors to accept fully refundable deposits that do not exceed a prescribed amount (the prescribed amount is expected to be 20% of the initial franchise fee, as in British Columbia) without triggering the disclosure document obligation;
- Allowing franchisors to enter into non-disclosure and location agreements with prospective franchisees without triggering the disclosure document obligation (Ontario is currently the only regulated province that does not permit non-disclosure agreements to be signed before delivering a disclosure document);
- Expanding the scope of the disclosure exemption to include the grant of a franchise to a person (or a company controlled by that person) who is currently an officer or director of the franchisor (or who was an officer or director of the franchisor up to four months prior to the relevant time); and
- Clarifying the “large investment” and “de minimis investment” disclosure exemptions to clarify timing and the method of calculating the relevant investment amount.
Bill 154 is already in its Second Reading and is expected to proceed through the legislative process quickly. Text for Bill 154 can be read at http://www.ontla.on.ca/web/bills/bills_detail.do?locale=en&Intranet=&BillID=5000.
We will continue to update you on Bill 154’s progress.
by W. Brad Hanna and Cara Zacks
A Cautionary Note
The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.
© McMillan LLP 2017
Insights (5 Posts)View More
Ontario (Might get the) Right to Repair – An overview of Bill 187 the Right to Repair Consumer Electronic Products, Household Appliances, Wheelchairs, Motor Vehicles and Farming Heavy Equipment Act, 2024
Ontario considers new right to repair legislation for consumer products and motor vehicles.
More Than Meets the Eye: The Legal Implications of British Columbia’s Agreement to Recognize Aboriginal Title Over Haida Gwaii
An analysis of legal implications related to the BC Government's agreement with the Haida Nation to recognize Aboriginal title over Haida Gwaii.
Lessons Learned from the TTC’s Ransomware Attack
Lessons learned from the recent investigation by the Ontario IPC into the effectiveness of the TTC's cybersecurity measures and ransomware attack response
Don’t Get Caught by Canada’s Patent Novelty Grace-Period
The key difference between Canada and other jurisdictions like the United States when relying on the grace-period for inventor disclosures.
Shifting Gears – Canada to Consider New Motor Vehicle Equipment Regulations to Help Prevent Auto Theft
Transport Canada announces plan to update safety standards to combat auto theft.
Get updates delivered right to your inbox. You can unsubscribe at any time.