Leading Canadian
FRANCHISE & BUSINESS LAW FIRM

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.

After the parties signed the purchase and sale agreement – before the purchase transaction closed and before the full franchise agreement was signed – the purchaser discovered problems with the franchise. He asked to cancel (rescind) the purchase and get his purchase money back.

The franchisor objected and took the position that the buyer was required to first close the purchase transaction, sign the franchise agreement, and only then attempt to rescind the purchase.

The Ontario Superior Court of Justice agreed with the purchaser. It held that the purchase and sale agreement was a “franchise agreement” under the meaning of the Act, and that the purchaser was entitled to rescind the purchase without having to close the transaction and without signing the full franchise agreement.

This court decision was very influential in the early years of the development of franchise disclosure law in Ontario. The case had a significant impact on how franchise lawyers and franchisors structured sale and resale transactions – by making sure that franchisors provide a fulsome disclosure package before the parties sign any binding agreement relating to the sale, even an agreement of purchase and sale.

Back

Franchise Law Blog

Ontario Court of Appeal Upholds...

Posted by | 29 September 2017

On July 4, 2017, the Court of Appeal for Ontario released a decision in Trillium Motor World Ltd. v. Read More

Franchise Renewals: Introducing...

Posted by | 15 August 2017

​This article, written by Ben Hanuka, was originally published by The Lawyers Daily on July 7, 2017, under the title “Courts struggle for balance with material changes to... Read More

Court of Appeal for Ontario Provides...

Posted by | 14 June 2017

Authors: Evan Ivkovic and Jeff Nguyen, Students-at-Law, Law Works P.C. Read More

View All

What’s New

Ben Hanuka gives expert commen...

We are pleased to announce that the Globe and Mail sought our firm’s expert opinion about the intensifying fight in the Tim Horton’s franchise. Read More

Law Works Welcomes New Articli...

We are pleased to announce that Rann Wang has joined Law Works P.C. as an articling student. Rann obtained his J.D. from Tulane University Law School in the U.S., and LL. Read More

​​Article in The Lawyers D...

We are pleased to announce that The Lawyers Daily published an article by Ben Hanuka on July 7, 2017, titled “Courts struggle for balance with material changes to renewal... Read More

View All

Request Information

Please Fill out this form to request information

*By filling out this form you agree to be contacted by Law Works to receive emails pertaining to requested information. You can unsubscribe at any time, simply contact us or reply "unsubscribe" to our emails.

Law Works Lawyers | 855-978-5293|tel:855-978-5293 | 80 Kincort Street, 2nd Floor, Toronto, ON M6M 5G1 | https://www.lawworks.ca

Please select the TRIANGLE and click the SUBMIT button

rolling
 Please wait...