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Retail Franchises

Savvy legal advice & representation to help Retail franchises manage unique challenges

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Retail franchise systems have been uniquely
challenged in recent years due to the impact
of closures and capacity restrictions.

Operating procedures have changed, and franchisors have shifted focus to online sales channels.
This can have a legal impact on the franchise agreement and franchisor/franchisee relationship.

In the retail industry, franchise and commercial disputes frequently come up on the following areas:

  • Designed suppliers, inventory costs, and supplier rebates
  • Exclusive territory
  • Customer lists
  • Product deliveries, online delivery apps
  • Compliance with and changes to system standards
  • Changes to hours of operation
  • Impact of inventory shortages and delays (e.g. cost of keeping more inventory than usual)

Who We Help

We advise retail franchisors and franchisees, including master franchisees, multi-unit franchisees and area developers, about their rights and obligations.  We provide representation as litigation and arbitration counsel in franchise and commercial disputes involving court litigation, private arbitration and mediation.

Retail

How We Help

We have extensive litigation experience in common areas where
disputes typically come up, including, but not limited to:

  • Renovation requirements
  • Point of Sale (POS) upgrades
  • Lease renewal terms
  • Designated suppliers
  • Food costs
  • Compliance with/changes to operating standards
  • Requirements to use online delivery apps
  • Calculation of royalties
  • Supplier rebates

Additional Retail Franchise Law Services

We also provide representation in franchise negotiations and franchise sales and transfers, including, among others, drafting:

  • Franchise Disclosure Documents
  • Franchise Agreements
  • Master Franchise Agreements
Copy of DSC04392-A

Retail Industry
Segments We Serve

We help retail franchisors and franchisees in the following retail sectors, among others:

  • Pet Supplies
  • Electronics
  • Convenience and Newsstands
  • Dry Cleaning
  • Wine Making
  • Weight Loss Services
  • Tanning Salons
  • Hair Salons, Nail Salons and Spas
  • Printing and Sign Products
  • Cannabis
  • Travel and Tourism
  • Fitness

Law Works - Important
Retail Industry Cases

Noteworthy retail franchise court decisions where we acted as counsel include the following:

Franchise Termination – Optical and Prescription Eyewear Retail Industry

Kanda Franchising Inc. and Kanda Franchising Leaseholds Inc. v. 1795517 Ontario Inc. (2017)

Case Synopsis

Law Works represented the franchisor in this case in a dispute with its franchisee. The underlying franchise dispute was about a termination of the franchised location, consequences arising from termination and whether the individual principals of the franchisee corporation were personally liable. The matter was heard in court over whether the case should proceed by way of arbitration.

Non-compliant Franchise Disclosure Document – Telecom Services

Giroux et al. v. 1073355 Ont. Ltd. et al (2018)

Case Synopsis

The Ontario Superior Court granted rescission to the franchisee under the Arthur Wishart Act (Franchise Disclosure), 2000, on the basis that the franchisor provided projections in the franchise disclosure document without disclosing the basis for them and other information required under the Wishart Act, as well as for delivering the disclosure document in in piecemeal.

Failure to Disclose Material Facts About Operational Deficiencies – Tutoring Operation

1518628 Ontario Inc. v. Tutor Time Learning Centres, LLC (2006)

Case Synopsis

This court decision is among the most influential Ontario Superior Court decisions on the issue of releases and waivers of statutory franchise rights.

Non-Compliant Franchise Disclosure Document – Tire/Automotive Retail

Mendoza v. Active Tire & Auto Inc., 2017 ONCA 471

Case Synopsis

This is a frequently cited decision of the Court of Appeal for Ontario, which reversed the decision of the motion judge and granted summary judgment for rescission in favour of the franchisee. There were significant disclosure deficiencies in the franchise disclosure document, including stale-dated financial statements of the franchisor, required signatures of the franchisor’s officers and directors, and piecemeal disclosure. This decision is also the first Court of Appeal decision expressly holding that the test for a franchisor’s compliance with its disclosure obligations under the Arthur Wishart Act (Franchise Disclosure), 2000, is objective; that the focus is on the nature of the deficiency and its impact on the disclosure requirements on a reasonable (not subjective) standard.

Insurance Non-Renewal and Alleged Bad Faith Against Insurer – Car Rental Franchise

2259084 v. Travelers Insurance Company of Canada

Case Synopsis

We represented two rental car operators in a complex insurance dispute involving an injunction application against the insurer, insurance brokerage and former franchisor, as a result of the insurer’s decision not to renew the operators’ fleet rental insurance policies. The case involved extensive evidence about alleged discrimination and bad faith conduct by the insurer and its alleged collusion with the franchisor against the rental car operators.

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