Ontario Disclosure – The Saga Continues

Disclosure regulation, at best, is only a 5% solution. The real dirty tricks come out when the franchise agreement is signed.

The INFO Franchise Newsletter
July 1, 1998

Ontario Disclosure – The Saga Continues

The Ontario Government is again making noise about franchise legislation, as it has been doing for more than twenty years. INFO has been saying for just as long that franchisors should provide disclosure documents in all provinces. Right now Alberta is the only province requiring that a disclosure document be provided by franchisors to prospective franchisee. Richard Cunningham head of the Canadian Franchise Association (CFA, 50545 Orbitor Drive, Building 9, Unit 401, Mississauga, ON, L4W 4Y4. Tel: (905) 625-2896, Fax: (905) 625-9076, E-Mail:ac.afc|ofni#ac.afc|ofni, WebSite: www.cfa.ca) is monitoring the situation carefully. The CFA fully supports the need for disclosure documents and Cunningham is in contact with all the provincial bodies which are similar to Ontario’s Ministry of Consumer and Commercial Relations (send comments by August 15, 1998 to Franchise Disclosure Consultation, Ontario Ministry of Consumer and Commercial Relations, Policy and Agency Relations, 35th Floor, 250 Younge St., Toronto, ON, M5B 2N5. Tel (416) 326-8885, E-Mail:ac.no.vog.rcc.me|ofnircc#ac.no.vog.rcc.me|ofnircc) which would be responsible for disclosure legislation. Cunningham tells INFO that he wants to make sure that all the provinces basically follow the Alberta requirements so that Canada does not find itself saddled with different provincial requirements as has happened in the U.S. among various states. Cunningham points out that he has contacted Industry Canada, the federal regulatory body, to see if federal guidelines would help avoid this problem, but they do not want to enter provincial areas or influence in these types of matters.

Les Stewart of the Canadian Association of Franchise Operators (Tel: (705) 737-4635, Fax: (705) 737-4950) says “Disclosure regulation, at best, is only a 5% solution. The real dirty tricks come out when the franchise agreement is signed. What is needed, is what the 1995 Ontario Franchise Sector Working Team really agreed to: creating an Office of the Franchise Ombudsman, registering every franchisor and franchisee, industry self-management, unbiased collection of industry statistics and enforcement of a mandatory Code of Ethics for both parties.”——
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Risks: Canadian Franchise Association, CFA, Industry Canada, Ministry of Consumer and Commerical Services, Ministry of Consumer and Business Services, Ministry of Government and Consumer Services, Ministry of Government Services, Ontario, franchisees and franchisors, Ombudsman, Code of ethics, almost never enforced, Franchise Sector Working Team, Toothless law, Disclosure laws: 10 per cent solution, Need more statistics, Canada, 19980701 Ontario disclosure

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