In a recent decision, Giroux v. 1073355 Ontario Limited o/a Schooley Mitchell Telecom Consultants,1 the Ontario Superior Court of Justice granted summary judgment to a franchisee seeking statutory rescission of its franchise agreement under Ontario’s Arthur Wishart Act (Franchise Disclosure), 2000 (the Wishart Act). Although the decision is fairly straightforward, as rescission was granted due to the failure of the franchisor to provide financial statements prepared in accordance with generally accepted accounting principles (GAAP), the decision did provide some helpful guidance on various rescission-related legal issues in Ontario.
The issues addressed in the decision are as follows:
The Schooley Mitchell case is a reminder to franchisors of their obligations to provide current and adequate financial disclosure to prospective franchisees, but also a helpful guide to what constitutes material information for the purposes of franchise disclosure.
1 Giroux et al. v. 1073355 Ont. Ltd. et al, 2018 ONSC 143, <http://canlii.ca/t/hplh5> (Schooley Mitchell)