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Our Important Court Cases

Country Style (Sirianni)

Full Case Name: Sirianni v. Country Style (2012)

This is an influential Ontario court decision under the Arthur Wishart Act (Franchise Disclosure), 2000, on the issue of bad faith conduct. It is the first Ontario decision dealing with franchise disclosure and rescission rights that are intertwined with a franchisor’s bad-faith conduct in a prolonged renewal process.

The franchisees renewed the franchise agreement, unaware that the landlord and Country Style were involved in a significant dispute about the renewal of the head lease, and that Country Style had agreed with the landlord to terminate the lease.

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Tutor Time Learning Centres

Full Case Name: 1518628 Ontario Inc. v. Tutor Time Learning Centres, LLC (2006)

This court decision is among the most influential Ontario court decisions under the Arthur Wishart Act (Franchise Disclosure), 2000, to date.

In this case, a Tutor Time Learning Centres day care facility was resold from the original franchisee to a new one. The franchisor required the spouse of the purchasing franchisee’s principal to sign the franchise agreement as guarantor.

The disclosure document appeared extensive and included all prescribed requirements, like financial statements, signed certificate, etc. However, it did not contain some important information about operational deficiencies that the day care had with the ministry.

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Sovereignty (Houston Stakes)

Full Case Name: Sovereignty Investment Holdings, Inc. v. 9127-6907 Quebec Inc. (2008)

This is an influential Ontario court decision under the Arthur Wishart Act (Franchise Disclosure), 2000, on the issue of what constitutes a materially deficient disclosure document.

The franchisee purchased a large restaurant in the Vaughan-Mills Shopping Centre that is located in Vaughan. The franchisor was a Quebec franchise startup.

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Quiznos (Site Selection Class Action)

Full Case Name: Al-Harazi v. Quizno’s Canada Restaurant Corporation (2007)

This was the first Ontario class action based on the disclosure requirements in the Arthur Wishart Act (Franchise Disclosure), 2000.

The class was comprised of about 200 franchisees. Each of them entered into a franchise agreement with Quiznos for a franchised restaurant in Ontario.

None of the approximately 200 franchise agreements resulted in the selection of a restaurant location and construction of a franchised restaurant.

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Lick’s Burger (Adlakha v. Meehan)

Full Case Name: Adlakha v. Meehan (2011)

This court decision is among the few Ontario court decisions relating to the enforceability of an arbitration requirement in a franchise agreement. It is the first decision holding that a franchisor’s affiliates, which are not parties to the franchise agreement, may be required to submit to arbitration together with the franchisor – even though they are technically not direct parties to the arbitration agreement.

The franchise agreement contained an arbitration provision, requiring the parties to submit all disputes between them to arbitration.

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341 Pizza (Ahmed)

Full Case Name: Ahmed v. 3 for 1 Pizza & Wings (Canada) Inc. (2004)

This court decision was among the earliest reported franchise disclosure decisions after the passage of Ontario’s franchise legislation, the Arthur Wishart Act (Franchise Disclosure), 2000.

It was the first Ontario decision that defined the term “franchise agreement” to include an agreement between a sub-franchisor and a sub-franchisee, requiring the delivery of a disclosure document.

The franchisor attempted to circumvent the disclosure requirements under the Act by structuring the arrangement as a “management agreement” (rather than a franchise agreement) with a “manager” (rather than a franchisee).

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341 Pizza (Bekah)

Full Case Name: Bekah v. Three for One Pizza (2003)

This court decision was among the earliest reported franchise disclosure decisions after the passage of Ontario’s franchise legislation, the Arthur Wishart Act (Franchise Disclosure), 2000.

It was the first Ontario decision that defined the term “franchise agreement” under the Act to include an agreement of purchase and sale.

The franchisor required that the franchisee purchase the store through a conventional purchase and sale agreement before entering into a franchise agreement. By structuring the transaction this way, the franchisor attempted to circumvent the disclosure requirements that the Act imposes on franchisors.

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