Is the Arthur Wishart Act applicable to my Franchise Agreement?

By Tonya Mah

The Arthur Wishart Act applies to franchise agreements entered into after July 1, 2000, if the business that is operated under the franchise agreement is operated or is to be operated partly or wholly in Ontario.

What is a franchise agreement?  “franchise agreement means any agreement that relates to a franchise between,

(a) a franchisor or franchisor’s associate, and

(b) a franchisee”

A Franchisor is a person who grants or offers to grant a franchise.

A Franchisee is a person to whom a franchise is granted.

The Arthur Wishart Act does not apply to:

1. “employer-employee relationships;
2. partnerships;
3. membership in a co-operative association;
4. an arrangement arising from an agreement to use a trademark, trade name, logo or advertising or other commercial symbol designating a person who offers on a general basis, for consideration, a service for the evaluation, testing or certification of goods, commodities or services;
5. an arrangement arising from an agreement between a licensor and a single licensee to license a specific trademark, trade name, logo or advertising or other commercial symbol where the licence is the only one of its general nature and type to be granted by the licensor in Canada with respect to that trademark, trade name, logo or advertising or other commercial symbol;
6. an arrangement arising out of a lease, licence or similar agreement whereby the franchisee leases space in the premises of another retailer and is not required or advised to buy the goods or services it sells from the retailer or an affiliate of the retailer;
7. a relationship or arrangement arising out of an oral agreement where there is no writing which evidences any material term or aspect of the relationship or arrangement; or
8. a service contract or franchise-like arrangement with the Crown or an agent of the Crown.”

All franchise agreements and franchise extending/renewal agreements entered into after July 1, 2000 that have a business operated wholly or partly within Ontario need to comply with, are bound by the Arthur Wishart Act and receive the applicable rights contained in the Arthur Wishart Act. 

Understanding franchise law is crucial for both franchisors, franchisees and prospective franchisees. The complexities of franchise agreements, disclosure requirements, and regulatory compliance demand careful consideration and expert guidance. By staying informed about the key aspects of franchise law, businesses can navigate the legal landscape more effectively, ensuring that their franchise operations are both legally sound and successful. For anyone involved in the franchise industry, remaining updated on legal developments and seeking professional advice can make a significant difference in achieving long-term success.

The application and outcome in franchise law is very fact specific, please contact Tonya Mah (tmah@sorbaralaw.com) should you have any questions or wish to obtain legal advice for your franchise, prospective franchise or franchisor.