Franchise Disputes
Resolve the dispute without losing sight of the franchise system
A dispute at one location may affect how a franchisor enforces agreements elsewhere. It can also raise concerns about disclosure, brand standards or the reputation of the system.
Law Works represents franchisors, master franchisees and area developers, and assists their lawyers and professional advisors, in franchise litigation and arbitration across Canada. The firm assesses the claim and helps clients decide how to respond, including what that response could mean for the rest of the system.
Commercial Dispute
Franchise disputes require legal and operational insight
Franchise disputes often turn on what happened during the relationship as well as what the agreement says. Disclosure records, correspondence, unique industry standards, local provincial practices, and the history of performance can be important to understanding each party’s position.
Law Works reviews that evidence, assesses the strengths and weaknesses, and advises on how to proceed.
Franchise disputes we handle
Law Works advises and represents franchisors, master franchisees and area developers, and assists their lawyers and professional advisors, in disputes involving:
- Franchise rescission claims and alleged disclosure deficiencies
- Operational non-compliance and enforcement of system standards
- Royalty, payment and sales-reporting obligations
- Territorial and location rights
- Renewal, non-renewal and termination
- Misrepresentation and allegations of bad-faith conduct
- Non-competition restrictions and other post-termination obligations
- Injunction applications and urgent relief
- Lease takeover and lease-renewal issues connected with the franchise relationship
A sound dispute strategy begins with the evidence, the governing agreements and the applicable law, alongside an understanding of each party’s position.
Litigation or arbitration?
Franchise disputes may proceed in court or through private arbitration. The franchise agreement may set the appropriate process, the parties may choose it, or the remedy sought may shape it.
Franchise litigation
Litigation provides a public court process. A matter may move through pleadings, documentary and oral discovery, motions, mediation, trial and, in some cases, appeal.
Franchise arbitration
Arbitration is a private adjudicative process in which the parties select an arbitrator to decide the dispute. It can offer procedural flexibility and access to a decision-maker with relevant subject-matter experience. However, costs, speed, and the scope of appeal depend on the agreement and the process chosen.
Law Works has significant expertise acting as counsel in litigation and arbitration. The firm can assess the dispute, the agreement, the urgency and the commercial objective before recommending how to proceed.
A strategy designed around what happens next
A demand letter, termination notice or injunction application can change the course of a dispute. Before taking that step, clients need to consider its effect on settlement discussions and other franchise relationships, as well as the evidence needed to support it.
Law Works advises on the proposed action and the consequences that may follow for the business.
Experienced franchise dispute counsel
Ben Hanuka has acted as counsel in leading Ontario franchise decisions and has focused on franchise and commercial dispute resolution since beginning his legal practice in 1998.
He writes and presents on franchise disputes and commercial arbitration and is actively involved in the legal profession in Canada and the US.
Law Works serves clients from offices in Toronto, Calgary and Vancouver and has experience with franchise matters across Canada and internationally.
Selecting a franchise arbitrator or mediator?
Counsel selecting a neutral for a franchise dispute need command of the franchise issues in the case, and the procedural skill to run an efficient, fair process. Those issues may include disclosure obligations, territorial rights or the enforcement of system standards, each with consequences for both sides of an ongoing relationship.
Ben Hanuka accepts appointments as an independent arbitrator and mediator in franchise disputes in Canada and internationally. He is a Fellow of the Chartered Institute of Arbitrators (FCIArb) and is active in the leading domestic and international arbitration associations. As leading counsel in franchise litigation and arbitration, he brings deep expertise in franchise law and arbitral procedure to every appointment.
In these appointments, Ben serves as a neutral, not as counsel for either party.
Frequently asked questions
What should a franchisor do when a franchise dispute first develops?
Preserve the agreement, disclosure records, notices, operational reports and relevant communications. Avoid taking an irreversible step before understanding the contractual requirements, statutory issues and possible system-wide consequences. Early legal advice can help protect options.
Can a franchise dispute be resolved without a trial?
Yes. Many disputes resolve through negotiation, mediation or settlement during litigation or arbitration. The best route depends on the legal issues, urgency, evidence, relationship and business objective.
What is the difference between franchise arbitration and mediation?
An arbitrator hears the parties’ evidence and submissions and issues a formal ruling and award. A mediator helps the parties explore a negotiated resolution but does not decide the dispute. Some matters use both processes at different stages.
Who does Law Works represent in franchise disputes?
Law Works’ counsel practice focuses on franchisors, master franchisees, and area developers, and supports the lawyers and professionals advising them. Ben Hanuka’s separate work as an arbitrator or mediator is neutral and may involve disputes between any parties to a franchise relationship.
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