Franchisors As Advisers? Proposed Changes To Franchise Disclosure In Ontario

International Law Office:

As of October 12 2010, Bill 102, the Arthur Wishart Amendment Act (Franchise Disclosure) 2010, has passed the second of three readings before the Legislative Assembly of Ontario, Canada’s largest province. This proposed amendment could change the existing franchise legislation by greatly increasing the quantity and scope of information that a franchisor would be required to communicate to prospective franchisees.

Bill 102 adds a single section to the Arthur Wishart (Franchise Disclosure) Act 2000 (SO 2000, c 3). This new Section 5.1 would require a franchisor to provide a prospective franchisee with an “educational document” whose scope goes far beyond that of the disclosure document already required by law. The content of this educational document includes many elements which have traditionally been considered part of the potential franchisee’s own due diligence. For example, the educational document is meant to include… carry on reading.

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