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July 2017 Archives

The Objective Approach to Rescission in Franchise Disclosure Cases - Mendoza v Active Tire & Auto Centre Inc.

Purchasing a franchise is a major business decision. The Arthur Wishart Act (Franchise Disclosure) ("the AWA") recognizes this fact and seeks to assist prospective franchisees by imposing strict financial and other disclosure requirements on franchisors. The legislation is aimed at ensuring that franchisees have sufficient information to decide whether or not they wish to enter into a franchise purchase transaction. If a franchisor fails to abide by the disclosure requirements contained in the AWA, then the franchisee may elect to "rescind" the franchise agreement altogether. Depending on the circumstances, the franchisee may also be entitled to damages.

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