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is Liisa Kaarid, vice president and legal counsel for Loblaw Companies Ltd. Kaarid says the company treats its fran- chisees — which operate stores under various banners such as No Frills and Valu-mart — no differently no matter where they operate in Canada. "In terms of franchise agreements, there is no difference in content from what we provide jurisdiction to jurisdic- tion. The terms of the contracts remain the same, franchisees the information mandated by the relevant disclosure law. Franchisees in unregulated provinces get the same mate- rial, she says, except that it is delivered in what Kaarid describes as a plain-lan- guage document, rather than the legalese required by formal disclosure documents (franchisees in regulated provinces also get the plain-language version, she says). "We provide fulsome information In regulated provinces, Loblaws gives " she says. to all our franchisees, not because we're required to by law in every province, but because we know that it makes good busi- ness sense, real desire to act in a decent manner — that' just a good way to do business." Jennifer Dolman, a partner with Osler " she says. "There's generally a s not to make the world a better place and have everyone singing Kumbaya, it's Hoskin & Harcourt LLP in Toronto, who advises a variety of franchisors, says many other national companies voluntarily disclose to franchisees in non-disclosure provinces. "Most of the clients we deal with will provide a disclosure document in prov- inces where there' says. "Even though they're not subject in those areas to legislation, they still want to share information so everyone is properly informed. Dolman cautions, however, that s no legislation," she just because an unregulated franchisee receives disclosure information, that doc- ument confers no special legal rights on the franchisee. "If a dispute came up, and a company had given a franchisee a disclosure doc- ument that was purely informational, they're not going to be able to rescind the contract or sue the franchisor for not complying with disclosure legislation," she says. representation, they can still sue you, like they always could for things like that, at common law. "[But] if there was some kind of mis- system is the recent jurisprudence in Ontario, where a majority of the coun- try's franchisors are based, and where the courts appear to be strengthen- ing the Arthur Wishart Act, Ontario's 12-year-old disclosure statute, in favour of franchisees. In 2010 the Ontario Court of Appeal A further wrinkle in the franchise " upheld a controversial ruling of the lower court in 405341 Ontario Limited v. Midas Canada Inc., which dealt with its related protections, once a contract is signed or once an existing contract comes up for renewal. The practical result, says Dolman, is that franchisors are now reconsidering whether to use the Wishart Act in con- tracts outside Ontario. "Any franchisor who is getting prop- er legal advice is not going to have the Ontario law apply in their agreements [outside the province]. But the real problem is not with new contracts," she says. "It's where you've got agreements that haven't expired yet that may have Ontario governing law clauses left over, and what that might mean." We have certain provinces where the law protects franchisees, and certain provinces where all franchisees can count on is the com- mon law. It costs a lot of money to go to court for franchisees. And those in disputes with their franchisors tend not to have a lot of money." TONY WILSON, Boughton Law Corp. side issues related to a class action by franchisees against Midas Canada Inc. Among other things, the courts said the Wishart Act, and all the rights it confers on franchisees — including the right of rescission — applies outside the province when franchisors use the act as the governing law of contracts in those jurisdictions. That may seem like an obvious out- come, but Dolman says it has caused alarm among Ontario-based franchi- sors, many of which have for years used the Wishart Act as the template for agreements in unregulated provinces. "Franchisors who use Ontario as the governing law for franchises operated outside of that province do so at the risk of having the Arthur Wishart Act apply, she says. That doesn't mean prospective fran- " chisees in B.C., for example, have a right to disclosure prior to signing a con- tract with a franchisor from Ontario. But they do obtain that right, and all for franchisors grappling with these complexities is simply to "keep your franchisees happy, so there won't be any litigation." Most franchisors do follow that strat- Dolman says the obvious solution egy, says Sotos, but not all — which is why disclosure laws exist. "Disclosure legislation is designed to eliminate the opportunists who figure they'll run a program, sell as many franchises they can over a few years before everybody wakes up and discovers there's no real business there. And by then they've taken the money and left the country. And it's not just small-time fran- " chisors or newcomers who sometimes operate improperly, says Sotos. "It's fair to say that the majority of franchisors operate ethically. It is not correct to say that even some prominent names don't engage in deceptive practices. Being prominent does not preclude some- body from being high handed in their operations." 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