On September 14, 2017, the Ontario Government introduced Bill 154, the Cutting Unnecessary Red Tape Act, 2017, which includes the amendments to the Arthur Wishart Act (Franchise Disclosure), 2000 (the “Wishart Act”) that were recommended by the Ontario Business Law Advisory Council in its Fall 2016 Report. The text of Bill 154 can be found here: http://www.ontla.on.ca/web/bills/bills_detail.do?locale=en&Intranet=&BillID=5000
The proposed amendments would allow franchisors to enter into non-disclosure and location agreements with prospective franchisees and to accept fully refundable deposits that do not exceed a prescribed amount (which is expected to be 20% of the initial franchise fee, as in British Columbia), without triggering the disclosure obligation. The amendments also set out important clarifications regarding certain disclosure exemptions, including the “large investment” and “de minimis investment” exemptions.
The Bill has received First Reading and will now proceed through the legislative process. Stay tuned for further updates on the Bill’s progress, as well as on the timing of expected amendments to the related Regulations.