Inadequate Disclosure or No Disclosure?
Where a franchisee attempts to rescind the franchise agreement, there will often be a dispute about whether the franchisor provided a disclosure document for the purposes of the Act. As a franchisor usually provides at least some written information to a prospective franchisee prior to the execution of a franchise agreement, franchisors in such cases typically take the position that, at worst, they provided a disclosure document that did not meet the statutory requirements and, hence, the shorter 60-day period under subsection 6(1) of the Act applies. On the other hand, franchisees seeking to rescind a franchise agreement often take the position that whatever documentation was provided to them was so deficient as to not constitute a disclosure document at all, in which case the longer two-year period under subsection 6(2) of the Act applies. Previous Rescission Cases There have only been a small number of reported decisions in which the Ontario courts have considered whether documentat
