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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.
The franchisees sued not only the franchisor, Lick’s Burger, but also its numerous affiliated entities – none of whom was a party to the franchise agreement. The affiliates took the position that they were not required to submit to arbitration because they were not parties to the franchise agreement, and therefore the arbitration agreement.
The Ontario Superior Court (Commercial List) held that all entities which were alleged to be franchisor’s affiliates were required to submit to arbitration along with the franchisor. There were two main reasons: First, the wording in the franchise agreement consistently referred to the term ‘franchisor’s affiliates’ in association with the term ‘franchisor’. Second, Ontario’s Arbitration Act, 1991, gives an arbitrator broad powers to determine such issues.Back
By: Anthony Pugh, Law Works Editor: Ben Hanuka, Law Works In Spina v. Shoppers Drug Mart Inc. Read More
This article was originally published in The Lawyer’s Daily as a two-part series on August 20, 2020 and August 24, 2020. Read More
We are pleased to announce that Ben Hanuka has been peer-selected for inclusion in the 2021 edition of The Best Lawyers™ in Canada directory in the area of Franchise Law. Read More
The August edition of our Franchise Issue in Focus, a new monthly supplement to our Franchise Law Newsletter, has now been sent out to subscribers of the Franchise Law... Read More