Norm Miller, MPP, Second Reading Debates

I had a constituent come to me who had been a franchisee for 30 years. It was a delivery business. He put in long hours starting at 2 a.m. each day. He’d accrued about $150,000 in equity in the business. The franchise agreement had changed over time. He understood there were penalties for breaching the terms of the contract, and he admits he broke what he thought was a fairly minor rule. He thought he might face a bit of a financial penalty but didn’t realize that he had the possibility of losing the franchise. But that’s what happened. His franchise was sold and he lost all his equity just as he was about to retire; and that business was his retirement fund.

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The Legislative Assembly of Ontario
September 23, 2010

Second Reading, House Debates
Private Members’ Public Business
Mr. Norm Miller, 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. NORM MILLER, MPP

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

Mr. Norm Miller: It’s my pleasure, first of all, to co-sponsor this bill with the member from Oak Ridges–Markham and the member from Parkdale–High Park. I have a short time to speak, as I have a couple of other colleagues who would like to speak to the bill. This is not a partisan issue.

Making a decision to take on a franchise is a major decision. I think probably all MPPs have had constituent stories where things have not worked out the way the franchisee expected. Individuals often commit their life savings and money from family and friends towards their business. They rely on the success of their business for their retirement. So they should go into the franchise arrangement with their eyes wide open, and Bill 102, An Act to amend the Arthur Wishart Act, will assist franchisees in exercising their due diligence. In fact, I believe it will improve franchisee-franchisor relations.

The Consumers Council of Canada states:
“Your bill, if passed, would assist all purchasers in understanding their rights and responsibilities when entering into a franchise agreement and improve comparability and competitiveness among franchisors.

“Franchisees have a responsibility to understand the agreements they enter into and should exercise due diligence. The bill would increase understanding about the nature and extent of due diligence and should help moderate costs associated with proper assessment of a given business opportunity.”

I think that’s well stated.

In the brief time I have to speak, I will just give one constituent story without revealing any names. I had a constituent come to me who had been a franchisee for 30 years. It was a delivery business. He put in long hours starting at 2 a.m. each day. He’d accrued about $150,000 in equity in the business.

The franchise agreement had changed over time. He understood there were penalties for breaching the terms of the contract, and he admits he broke what he thought was a fairly minor rule. He thought he might face a bit of a financial penalty but didn’t realize that he had the possibility of losing the franchise. But that’s what happened. His franchise was sold and he lost all his equity just as he was about to retire; and that business was his retirement fund.

I will note that paragraph 7 in our bill states that part of the educational document is “a statement that it is advisable to have a lawyer and an accountant review the entire franchise agreement, particularly with respect to bankruptcy, termination, renewal, transfer and sale of the franchise.”

If this particular constituent had done that, particularly consulting with a lawyer who specializes in franchise law—that is the one thing, from the hearings that we had prior to this bill, that I would advise is probably the most important thing to do.

I would simply say that I hope that members will support the bill and give it a chance to go to committee, where I know that there will be lots of input from those prospective franchisees, from franchisees who have had a bad experience and from franchisors. It’s a big business, so they have an interest in it.

I note that the Canadian Franchise Association sent a letter around just yesterday, or a couple of days ago, with some concerns they have. I would encourage them, if it passes and goes to committee, to come to committee and have their say. Otherwise, I would ask that members support this bill. I do believe it will make a difference in this important industry in the province of Ontario. With that, Mr. Speaker, I thank you for the opportunity to speak.

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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