The Canadian Bar Insurance Association

Lawyers' job to identify hidden franchises

Although the act governing franchise law in Ontario was enacted more than a decade ago, confusion remains as to whether certain business relationships are franchises, Toronto business lawyers Scot Patriquin and Mark Tozer write in Lawyers Weekly.

“Since a franchise arises by definition regardless of the intentions of the parties, franchises can sometimes be formed by accident. As lawyers, it is our job to identify a franchise when we see it. If we fail, the consequences to our clients can be severe,” write Patriquin and Tozer,  who practice corporate/commercial and franchise law with Brauti Thorning Zibarras LLP.

In Ontario, whether a business relationship is a franchise is based on judicial interpretation of vague statutory tests. As such, write Patriquin and Tozer, counsel must be mindful when relationships come close to the line.

“In light of the potentially grave consequences, it is our job as lawyers to think carefully about the margins, and either keep our clients at a safe distance or insist on disclosure compliance. By doing so, we protect our clients from becoming the victim of a costly accident,” write Patriquin and Tozer.

To Read More Scot Patriquin Posts Click Here
To Read More Mark Tozer Posts Click Here
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