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

…I would like to ask the minister if there is not a mandatory dispute resolution mechanism provided in the Arthur Wishart Act, and if not, why not? Why would there not be any dispute resolution mechanism in the legislation, and what other options would the franchisees have?

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Legislative Assembly of Ontario
November 5, 2001

House Debates, Question Period
Oral Question
Wayne Wettlaufer, MPP

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

FRANCHISE BUSINESSES

Mr Wayne Wettlaufer (Kitchener Centre): I have a question for the Minister of Consumer and Business Services. I hope you're aware that we've got a problem in Ontario with Grand and Toy and their franchise stores. Grand and Toy has decided to terminate at the end of this year their franchise agreements affecting 23 franchise operators throughout the province. One of these franchise operators is in my riding. This affects the investment that these franchise operators have made in their stores. It affects them considerably. It affects their future financial wherewithal.

I have a franchisor in my riding who would never believe in operating this way. They're called M&M Meat Shops. They're the nation's best franchisor. I was wondering if you could use them as an example. I wonder if you're aware of the situation involving Grand and Toy. If you are, what are you doing about it, and can the franchise act offer any assistance?

Hon Norman W. Sterling (Minister of Consumer and Business Services): This is an important issue to many members of the Legislature. Mr O'Toole and Mr Tascona also raised this issue with me weeks and months ago when it first arose.

I feel very much sorry for the Grand and Toy franchisees who had this sprung on them as a great surprise to them. They have taken an action through a class action suit, and although many of them entered into contracts which were made prior to the passing of the franchise act, that act still allows them to use provisions of it to include it as part of their suit, and they've done that in their statement of claim.

Mr Wettlaufer: I wasn't able to hear all of the answer because of the heckling on the other side, but I would like to ask the minister if there is not a mandatory dispute resolution mechanism provided in the Arthur Wishart Act, and if not, why not? Why would there not be any dispute resolution mechanism in the legislation, and what other options would the franchisees have?

Hon Mr Sterling: The Arthur Wishart Act, of course, was passed about two years ago. At that time, there was not included mandatory arbitration. But in our general civil litigation process there is the option for the Attorney General to demand that a mediation process take place. I understand that is the case with regard to this lawsuit, and in fact the franchisor and the franchisees are going through a mediation process right now.

The legislation we passed two years ago was the first legislation to protect franchisees in terms of dealing with unscrupulous franchisors. We don't know what the total effect of that legislation is. This is a good test of that particular act. If it proves not to be enough, we'll bring it back and change it.

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/L062A.htm#P412_83124

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


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Risks: Justice only for the rich, Arbitration, Arthur Wishart Act (Franchise Disclosure), 2000, Canada, Refusal to renew contract, Expropriation without compensation, Dispute resolution means franchisee goes broke, Bad faith and unfair dealings, Lawsuits, group, Canada, 20011105 Oral Question

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