Rescission notice and refund (franchise)

The right to rescind is covered in rescission right. This entry is about the paperwork that follows. Ontario’s s. 6(3) requires written notice delivered personally, by registered mail, by fax or by another prescribed method, to the franchisor’s address for service or to any other person designated in the franchise agreement. Section 6(4) then sets the day the notice takes effect by delivery method.

What the franchisor owes

Under Ontario’s s. 6(6), the franchisor or its associate must, within 60 days of the effective date, refund money received from or for the franchisee other than money for inventory, supplies or equipment. It must also buy back inventory still on hand, and supplies and equipment, that the franchisee bought under the franchise agreement, at the franchisee’s purchase price, and compensate for losses in acquiring, setting up and operating the franchise, less those amounts. British Columbia’s s. 6(5) gives 60 days for the refund. Manitoba’s s. 6(3) also requires written notice.

What to check

• Whom the agreement designates to receive notice
• Which delivery methods the Act accepts and when each takes effect
• A dated list of every payment made, to match against the refund
• Whether the rescission window is still open in your province

See also when can I cancel a franchise purchase.