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    The Requirement to Customize Franchise Disclosure Documents

    It is no longer sufficient for a franchisor to provide prospective franchisees a generic disclosure document. Ontario courts have determined that disclosure documents must be customized to include specific material facts about the actual franchise being granted if such site-specific information is known at the time of disclosure.

    If known at the time of disclosure, it is recommended that the disclosure document include the following: location of the business, territory granted to franchisee, lease arrangements, projected opening date, initial franchise fee, performance of the business (if an existing franchise location), demographic information about the location, and other material facts about the particular franchise being granted.

    If such information is unknown at the time of disclosure, the franchisor should provide the information to the prospective franchisee by way of a statement of material change once it becomes known.

    Nevertheless, in the event that the franchise location is unknown at the time of the disclosure, the disclosure document should include a description of the general site-selection process. Similarly, in the event of a pending head lease, the franchisor’s disclosure document should include a description of the general process of the franchisor securing the head lease.

    The content on this website is for information purposes only and is not legal advice, which cannot be given without knowing the facts of a specific situation. You should never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. The use of the website does not establish a solicitor and client relationship. If you would like to discuss your specific legal needs with us, please contact our office at 613-563-7544 and one of our lawyers will be happy to assist you.

    Posted By: Merovitz Potechin

    Merovitz Potechin LLP has been serving the business and personal needs of the Ottawa area since 1976. Our lawyers will work directly with you throughout your legal matter.

    We are committed to asking the right questions so you obtain the best advice. We are responsive to your needs, and you can trust that we will give you the care and attention you deserve.

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