Litigation disclosure (franchise)

A buyer reading a disclosure document can use this part to see whether the franchisor, or the people running it, have faced franchisee lawsuits. It sits within the wider contents described in what a franchisor must disclose before you sign.

Ontario

Section 2 of O. Reg. 581/00 requires a statement, with details, of whether the franchisor, its associate or a director, general partner or officer of the franchisor has been found liable in a civil action of misrepresentation, unfair or deceptive business practices or violating a law that regulates franchises or businesses, including a failure to provide proper disclosure to a franchisee, or has such an action pending. Separate items cover convictions, administrative orders and bankruptcies.

Alberta

Schedule 1, item 3, of Alberta’s Franchises Regulation asks for details of any finding of liability in a civil action, or any pending action, involving franchises or other businesses and involving misrepresentation, unfair or deceptive acts or practices and comparable actions. It reaches the franchisor, its associates and those directors, general partners and officers who have management responsibilities relating to the franchise. This entry covers Ontario and Alberta only; check the rules in the province where the business is. Confirm what a case was about with a litigation search rather than relying on the summary alone.