Franchising In Canada ' 2022 Year In Review

• Author: Mr John Clifford, W. Brad Hanna, FCIArb., Andrae J. Marrocco, Adriana Rudensky, Mitch Koczerginski, Peter Giddens, Enda Wong, Michael P. Whitcombe, Ben Bathgate, Mervyn Allen, Sidney Elbaz, Paola Ramirez and Jessie Treagus
• Law Firm: McMillan LLP
• Published date: 07 February 2023

Overview

In this update we summarize some of the more significant franchise law cases and legislative developments that occurred in 2022.

Top 6 Case and Legislative Highlights in Franchise Law in 2022

• The Ontario Court of Appeal confirmed in two decisions that franchisees are not required to show that disclosure deficiencies subjectively impaired their ability to make an informed investment decision to succeed in claims for rescission. Following the 2018 Court of Appeal's decision in Raibex, there was some uncertainty as to whether fundamental disclosure deficiencies also required subjective proof that the franchisee was unable to make an informed investment decision.
• The first decision reported under New Brunswick's Franchises Act discusses the necessity of providing statute-compliant financial statements. ¹
• The Ontario Court of Appeal held that continued performance after the expiry of a franchise agreement had the effect of extending the agreement. ²
• The Ontario Superior Court of Justice noted that goodwill associated with a trademark can be established by obtaining evidence from potential franchisees. ³
• Small business franchisors may be eligible for additional funding and loans due to the amendments to the Canada Small Business Financing Regulations and Canada Small Business Financing Act.
• The Single-use Plastics...