Bas Balkissoon, MPP, Second Reading Debates

… I would recommend that the committee seriously consider that a transaction between a franchisor and a franchisee is no different than someone buying real estate; that there is a purchasing agreement and there is a deposit, and that all those deposits be kept in trust until the franchisor delivers that product, goods or services that were contracted for. This way, for the person investing in a particular franchise, their money is protected until they actually become the owner-operator of that franchise.

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The Legislative Assembly of Ontario
September 23, 2010

Second Reading, House Debates
Private Members’ Public Business
Mr. Bas Balkissoon, MPP

The Committee of the Whole
Second Session, 39th Parliament
Toronto, Ontario, Canada

ARTHUR WISHART AMENDMENT ACT (FRANCHISE DISCLOSURE), 2010
LOI DE 2010 MODIFIANT LA LOI ARTHUR WISHART SUR LA DIVULGATION RELATIVE AUX FRANCHISES

MR. BAS BALKISSOON, MPP

The Acting Speaker (Mr. Jim Wilson): Further debate?

Mr. Bas Balkissoon: I’m pleased to have the opportunity to speak on private members’ business, Bill 102, an act to amend the Arthur Wishart Act, 2000. I’d like to commend the members who co-sponsored this private member’s bill. I believe it is an excellent and much-needed amendment, and I will give it my full support.

The amendment to the bill would require a franchisor to provide the prospective franchisee with an educational document containing very specific and detailed information. This bill provides a very comprehensive list of things to consider and to investigate prior to entering into an agreement. It allows prospective franchisees to have the opportunity to decide whether this is something that they believe they can handle, not only from a financial perspective, including start-up and ongoing expenses, but also in terms of leadership, education and previous experience, to name a few. If followed closely, it will certainly help the prospective franchisee in making an informed decision.

I am sure we all have stories that we can tell. I can tell you that a number of years ago, I was made aware of and became involved in the investigation of franchise fraud involving one particular franchisor that affected about 10 of my constituents. This person defrauded approximately 16 potential franchisees using the same nonexistent real estate location over and over again. These were honest, hard-working people who used their hard-earned money. Their life savings were used to invest, only to discover that they had been defrauded. They did pursue legal action against the franchisor that operated under different names. The courts ordered in favour of the franchisees; however, they were never able to collect. There was no place for them to turn, and very little assistance was available to help them recover their hard-earned dollars.

As I mentioned, I’m definitely in support of this bill. I would like to make a small suggestion which would provide a further level of security for franchisees. I’m sure a lot of people will consider it a little bit tough, but I think it’s worth considering as the bill moves through committee in second reading.

As this bill moves through, I would recommend that the committee seriously consider that a transaction between a franchisor and a franchisee is no different than someone buying real estate; that there is a purchasing agreement and there is a deposit, and that all those deposits be kept in trust until the franchisor delivers that product, goods or services that were contracted for. This way, for the person investing in a particular franchise, their money is protected until they actually become the owner-operator of that franchise. There will be no risk to their investment, as I have seen with my constituents losing in their venture.

I’m fully in support of this. I hope that amendment will be considered when committee looks at it, and I’m glad to add my two bits to this particular bill.

This document is a verbatim copy of the Official Report of Debates (Hansard):
http://www.ontla.on.ca/web/house-proceedings/house_detail.do?Date=2010-09-23&Parl=39&Sess=2&locale=en#P953_222324

Copyright (c) 2010
Office of the Legislative Assembly of Ontario
Toronto, Ontario, Canada


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Risks: Appropriate franchise law, Arthur Wishart Act (Franchise Disclosure), 2000, Canada, Arthur Wishart Amendment Act (Franchise Disclosure), 2010, Canada, Attempts to rehabilitate image, Awareness, Call for franchise law, Can't collect on court decision, Deceptive business practices, Deposit money not refunded, Fraud, Imbalance of information and power, Life savings gone, Predatory actions, Private Members’ Bill, Canada, 20100923 Second Balkissoon

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