Probe sought in franchise gag orders

“It is a concern expressed by a lot of (franchisees) where they are contractually told they cannot even talk to other people about their franchise. I think we could all agree that it is ridiculous and something needs to be done.“

The Toronto Star
December 9, 1994


PROTECTION SOUGHT: NDP backbencher Jim Wiseman meets yesterday with some of the 70 franchisees who demonstrated at Queen's Park for the province to introduce franchise industry legislation.

Probe sought in franchise gag orders
Kevin Donovan

The attorney-general’s ministry will be asked to investigate whether franchise companies can legally force buyers to sign away their right to organize and protest.

That’s one of several plans Consumer Minister Marilyn Churley has to clean up the turbulent franchise industry.

“It is a concern expressed by a lot of (franchisees) where they are contractually told they cannot even talk to other people about their franchise,” Churley said in an interview.

“I think we could all agree that it is ridiculous and something needs to be done, “ she said.

Churley’s comments came after meeting representatives of a group of franchisees who rallied at Queen’s park, calling for legislation.

They carried signs. One read: “How do you lose your life’s savings? Buy a franchise.” Another bore the slogan, “Franchise laws stop franchise crooks.”

Only about 70 people turned out. NDP backbencher Jim Wiseman, who recently introduced a private member’s bill calling for franchise legislation, remarked that more franchisees would show at these rallies if they were not fearful of being fined or terminated by their franchisor for speaking out.

Churley said she will ask Attorney-General Marion Boyd to have ministry lawyers examine whether or not franchisors have the legal right to stop people from complaining, which is a clause in many franchise contracts.

Yesterday, the end of this session was the last chance for the NDP government to pass franchise legislation. The Legislature will sit again in March or April, but there will be little or not time to pass a bill before the provincial election is called.

One franchisee at the rally questioned why the NDP waited so long to take action.

Nevertheless, Churley said she hopes to do something to help the thousands of people who invest in the industry many call the “Wild West of the business world.”

Many ideas will be bandied about, including legislation and the concept of self-regulation, which could mean that anyone selling franchises in Ontario would have to be registered with an industry group.

Whatever is put in place must have disciplinary powers, Churley said.

Churley now says cleaning up the franchise industry is a priority for her ministry. It was not always so. The consumer ministry has been studying the matter since 1971, when a government report exposed a litany of serious problems.

In the spring of 1993, The Star published a series of stories detailing concerns of franchisees at the giant Pizza Pizza company. Those concerns were the subject of a secret arbitration that was concluded in September. Pizza Pizza, which has denied all allegations, is appealing the ruling and trying to keep it confidential at the same time.

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Risks: Ministry of Consumer and Commerical Services, Ministry of Consumer and Business Services, Ministry of Government and Consumer Services, Ministry of Government Services, Ontario, Political champions, Gag order (confidentiality agreement), Protest, rally and demonstration, Life savings gone, Wild West of the business world, Arbitration, secret, Veil of secrecy, Can’t talk to media, Can’t talk to member of parliament, Canada, 19941209 Probe sought

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