House Debate, Question Period, Legislative Assembly of Ontario, Canada

This is only the tip of the iceberg. I'm also hearing from other franchisees in the restaurant sector as well who are losing their lifelong investments.

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Legislative Assembly of Ontario
October 31, 2001

House Debates, Question Period
Oral Question
Marie Bountrogianni, MPP

The Committee of the Whole
2nd session, 37th Parliament
Toronto, Ontario, Canada

FRANCHISE BUSINESSES

Mrs Marie Bountrogianni (Hamilton Mountain): My question is to the Minister of Consumer and Business Services, and is on behalf of the 40,000 franchise owners in Ontario who are vulnerable to the arbitrary termination of their franchise agreements.

Small businesses, the engine of this economy, entrepreneurs like my constituent Janis Snyder and 25 other Grand and Toy franchisees across the province will lose their businesses with no reason given or compensation offered. All but two Grand and Toys will be closed this December. A specialist in the field brought these loopholes and potential disasters to your attention during the hearings for the Arthur Wishart Act (Franchise Disclosure). This government chose to ignore the fact that the majority of problems in franchising occur after signing the contract.

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This is only the tip of the iceberg. I'm also hearing from other franchisees in the restaurant sector as well who are losing their lifelong investments. Will the minister bring forward amendments to this franchise act that would require fair commercial standards in the termination, renewal and performance of franchise agreements?

Hon Norman W. Sterling (Minister of Consumer and Business Services): I am aware of this problem, and it has been raised with me by several members of the government caucus.

Mr Speaker, as you may know, there is a class action underway by the franchisees against the franchisor in this case. As such, it would be somewhat inappropriate for me to comment on the merits of the case. But I will say this: I have read the statement of claim of the franchisees, and the basis of their statement of claim is in fact the Arthur Wishart Act.

Mrs Bountrogianni: Minister, the Arthur Wishart Act doesn't help them in this case. Disclosure is only if the contract is open. The franchisor is closing the contracts, ending the contracts; therefore, they don't have to disclose.

There's a loophole here. You were warned about this loophole; check the Hansard. You must understand that the parties in franchise agreements are not on an equal footing. Ontario's franchisees are looking to this government to level the playing field and extend the franchise act to include fair commercial practices in the performance and termination of franchise agreements.

Without your commitment, these entrepreneurs remain vulnerable to the arbitrary actions of franchisors. My constituent Janis is a single mother with two daughters. She employs 30 people and has invested everything into her business. Think of the ripple effect. Hundreds of people will lose their jobs and many small businesses will lose all their investments.

Two things need to be done. First, the Arthur Wishart Act needs to be reopened and amended. Second, and in the meantime, will the minister take action and protect these Grand and Toy franchisee victims in Ontario and avert the loss of hundreds of jobs?

Hon Mr Sterling: First of all, there was a private contract between the franchisees and the franchisors, which allowed certain things to be done or not done within the framework of those agreements. So a contract was signed. Presumably these people had legal advice with regard to the contract they were signing. If in fact the franchisor is outside of those agreements within the contract, the franchisees will be able to sue for damages.

I must say to the member opposite that disclosure is not part of the lawsuit which the franchisees have put forward in this case. Again, the franchisees are in fact relying on the very act that she is criticizing, the Arthur Wishart Act. Read the statement of claim.

This document is a verbatim copy of Hansard, the official record of the Legislative Assembly of Ontario. To review the original transcript:
http://www.ontla.on.ca/hansard/house_debates/37_parl/Session2/L060A.htm#P337_77596

Copyright (c) 2001
Office of the Legislative Assembly of Ontario
Toronto, Ontario, Canada


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Risks: Arthur Wishart Act (Franchise Disclosure), 2000, Canada, Ministry of Consumer and Commerical Services, Ministry of Consumer and Business Services, Ministry of Government and Consumer Services, Ministry of Government Services, Ontario, Expropriation without compensation, Refusal to renew contract, Bad faith and unfair dealings, Disclosure laws: 10 per cent solution, Life savings gone, Canada, 20011031 Oral Question

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