Not All Litigation Involving a Franchisor is Material

We are pleased to share a recent decision in which our firm was successful in having a rescission claim against our client dismissed by the Ontario Court of Appeal. In a unanimous ruling, the court held that the existence of litigation commenced by the franchisor for the benefit of the system did not constitute a “material fact” within the meaning of the Arthur Wishart Act (Franchise Disclosure), 2000. Consequently, the failure to disclose the litigation did not amount to a deficiency in disclosure and did not entitle the franchisee to the remedy of rescission.

A copy of the decision can be found here.

Our analysis of the decision will follow shortly.

About The Authors:

Daniel So

As a lawyer at McKenzie Lake, I focus my practice on franchise and intellectual property law and have been referred to as an expert by the Canadian Legal Lexpert  Directory. In addition to my practice, I am a franchise consultant for CBC’s Dragon s Den. For further information email me at so@mckenzielake.com.

Melissa Won

I have experience in all aspects of Franchise Law. I also advise clients with respect to intellectual property and information technology matters.