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Inside Internal Controls

News and discussion on implementing risk management

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Franchise

Franchise article series: What is a franchise?

In order to determine whether the Franchises Act applies to a particular business model, one must first review the definition of a “franchise” in the Act as well as in relevant court decisions.

 

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Ontario court declines to order franchisees to pay royalties

In a recent Ontario case, the Justice was faced with a claim by a franchisor against seven of its 11 franchisees who had ceased paying royalties and marketing fund contributions to their franchisor.

 

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Ontario court applies statutory definition of franchise

In Fyfe v. Stephens, 2018 ONSC 5066 (“Fyfe”), the Ontario Superior Court of Justice found that the relationship between two parties was a franchise relationship, even though the agreement at issue expressly disclaimed a franchise relationship.

 

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Manitoba court finds that distribution arrangement is not a franchise

In Diduck v. Simpson, 2018 MBQB 76 (“Diduck”), the Manitoba Court of Queen’s Bench reviewed a distribution agreement and found that it failed to meet the test for a “franchise” under Manitoba’s Franchises Act, C.C.S.M. c. F156.

 

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McDonald’s, and not just its franchisees, liable for worker treatment says National Labor Relations Board: should Canadian franchisors be concerned?

The general counsel of the United States’ National Labor Relations Board (NLRB) recently ruled that McDonald’s should be considered a joint employer with its franchisees. This finding, if ultimately upheld, could pave the way for nationwide union organizing of franchisors.

 

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