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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
Author: Robert Jones, Law Works P.C. Editor: Ben Hanuka, Law Works P.C. In 2462192 Ontario Ltd. v. Paramount Franchise Group Inc. Read More
Author: Ben Hanuka, Law Works P.C. Overview In Westeinde (FNP) Inc. v. RE/MAX Core Realty Inc. Read More
We are pleased to advise that Ben Hanuka has been admitted as a Fellow of the Chartered Institute of Arbitrators. Read More
We are pleased to announce that the Canadian Arbitration and Mediation Journal will publish in its upcoming issue a paper authored by Ben Hanuka about franchise arbitrations. Read More