Law Times

Law Times • JuLy 9, 2012 FOCUS Big firms getting in on the game as business area grows Franchise law tor with the Ontario Bar Association' Jennifer Dolman. As I tion, Osler Hoskin & Harcourt LLP partner Dolman receives lists of attendees for section events. Over the last few years, those lists have been getting pro- gressively longer, as interest in the area quickly expands beyond the small collegial core of practi- tioners Dolman has been run- ning into on an everyday basis on files for the last 15 years. "I've noticed a lot of newcom- program co-ordina- s franchise law sec- BY MICHAEL McKIERNAN Law Times f you're an Ontario lawyer with an interest in franchise law, your name has prob- ably crossed the desk of Dolman says more will follow. "You can see how it fits in well to the notion of class proceed- ings," she says. "You're in one sys- tem, with one franchisor, with a common franchise agreement. You have all this commonality, so as a result, we have had a number of class actions commenced over the last few years." Like Dolman, Steven sophistication or knowledge of the lack of dis- closure isn't a fac- tor, which gives some of them a potentially exit from a failing business. In addition, easy Goldman has practised in the field long enough to experience its big bang moment. The for- mer Fogler Rubinoff LLP partner founded his own firm, Goldman Hine LLP, in 1998. That was two years before the Arthur Wishart Act came into force. "It was an act that was designed ers," she says. "More big firms are getting into the franchise area and are showing they're prepared to make a significant investment in it." It' Dolman. "There' the multitude of existing fran- chisors doing business in the province and the army of busi- nesses, particularly those based in the United States, exploring an Ontario launch, she says. North America' s no wonder, according to s a lot of work" both for ic, she predicts, is also set to spark a boom in service-orient- ed franchises geared to older consumers such as massage therapy providers and home nursing-care companies. A rash of class actions has s changing demograph- in large part to protect franchi- sees," he says. "They come in vari- ous shapes and sizes, but the vast majority are small entities and relatively unsophisticated individ- uals. And franchise agreements tend to be very one-sided docu- ments in the franchisor' the Wishart Act was kind of there to level the playing field. Goldman, whose clients include both franchisors and franchisees. "It' new rights and obligations for various parties. But as a whole, it' " The impact has been huge, says s favour, so " created a lot of work for lawyers. There has been a lot of litigation in quite a short amount of time. Dolman represents franchisors exclusively and says the court's s clarified rights and created s pricked the ears of lawyers and the general public alike with huge monetary sums and household names combining to make juicy news stories. Tim Hortons recently fended off a lawsuit from franchi- sees, while Dunkin' Donuts took a $16.4-million hit for its treat- ment of Quebec-based franchi- sees in a recent high-profile case. interpretation of various provi- sions of the act has been consis- tently generous to franchisees. For example, the act gives franchisees a right of rescission within two years in cases where franchisors failed to give a dis- closure document to the fran- chisee 14 days before signing the franchise agreement. That recover all losses associated with acquiring, setting up, and operat- ing the franchise. The franchisees' allows franchisees to Ball Professional Corporation Excellence in Employment & Labour Law • Counsel in Leading Cases • • Author of Leading Treatise • Wrongful Dismissal Employment Law Human Rights Post Employment Competition Civil Litigation Appellate Advocacy Disability Referrals on behalf of employees and employers respected 82 Scollard Street, Toronto, Canada, M5R 1G2 (416) 921-7997 ext. 225 or srball@82scollard.com Contact Stacey Ball at web: www.staceyball.com LEONARD KUNKA | CRAIG BROWN | DARCY MERKUR Since 1936 Thomson, Rogers has built a strong, trusting, and collegial relationship with hundreds of lawyers across the province. As a law firm specializing in civil litigation, we have a record of accomplishment second to none. With a group of 30 litigators and a support staff of over 100 people, we have the resources to achieve the best possible result for your client. Moreover, we are exceptionally fair when it comes to referral fees. We welcome the chance to speak or meet with you about any potential referral. We look forward to creating a solid relationship with you that will benefit the clients we serve. YOUR ADVANTAGE, in and out of the courtroom. TF: 1.888.223.0448 T: 416.868.3100 W: www.thomsonrogers.com ThomsonRogers_LT_Feb13_12.indd 1 www.lawtimesnews.com all_LT_Nov7_11.indd 1 11-11-08 11:44 AM Ontario courts have treated par- tial or faulty dis- closure as if there was no disclosure at all when the error constituted a "fatal deficiency. because they're perceived to be vulnerable, franchisor edu- cation is a signifi- cant part of her practice as she attempts to help clients says. She notes " she Franchise law 'fits in well to the notion of class proceedings,' says Jennifer Dolman. big victories for franchisors, but for the most part, it' lenging area to work in because there is a bias in favour of franchi- sees," says Dolman. As a result, franchisors should "There have been a couple of s a really chal- " be careful about which cases they take to court, she says. Cases involving corporate sloppiness may not be suitable. "You have to be mindful of the fact that if there's some ambiguity, the court is more than likely to interpret in the franchisees' favour created a database of Canadian franchise case law to help law- yers keep on top of the constantly developing jurisprudence. Cases date back as far as 1917. Originally developed last year Disclosure has these draconian consequences, so you've got to make sure on the commercial side of things that clients are get- ting these things right. Keeping up with the law is very impor- tant so we can advise them of best practices to avoid situations where they could be exposed. At Goldman Hine, the firm has is scary if you haven't done things right. of trouble in the first place. "The act stay out " great resource first for our own firm but we put it on our web site and it' says Goldman. "I get a lot of very positive feedback at franchise law events from other lawyers. We're probably helping out our competition." Between 2008 and 2009, s been very popular," for in-house use by associate Jonathan Mesiano-Crookston, the firm has since opened up access on its web site. "We thought this would be a PAGE 13 Goldman got a chance to see another side of the franchise busi- ness when he took over as presi- dent and CEO of Speedy Auto Service and Minute Muffler. The job involved restructuring both companies after they had been purchased from court-appointed receivers in Ontario and Alberta. "When you actually become a decision-maker as opposed to simply an adviser, it gives you a very different feel for things," he says. "I suddenly became a con- sumer of legal services rather than just a provider. That was important and I think it made me more sensitive to the needs of my clients." LT TRUST you're putting your reputation on the line. It's all about trust well placed. 12-02-07 2:07 PM

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