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Lapointe Rosenstein Marchand Melançon LLP | Canada | 3 Aug 2021

Deli wars! Unauthorised Dunn's franchisees and their directors are liable for infringement

The Federal Court recently decided on a matter of alleged trademark and copyright infringement. This case is an important example of how franchisors can use trademark and copyright legislation to protect their brand and enforce ownership of their franchise system. It also serves as a reminder for franchisors to ensure that the copyright in various materials used in the franchise system is......
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Lapointe Rosenstein Marchand Melançon LLP | Canada | 27 Apr 2021

When it's not 'better late than never' with franchisee claims

The Quebec Superior Court recently revisited certain franchising principles and reaffirmed the leading principles of Dunkin' Brands Canada Ltd v Bertico inc concerning the duties of franchisors, while holding both franchisor and franchisee responsible for their respective actions and negligence that led to the downfall of their relationship. This decision highlights the importance of......
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Lapointe Rosenstein Marchand Melançon LLP | Canada | 16 Feb 2021

Cold cut for franchisees! Supreme Court of Canada denies designated supplier's duty of care for pure economic loss

The Supreme Court of Canada recently dismissed the proposed class action brought by Mr Sub franchisees against Maple Leaf Foods for damages resulting from a listeria outbreak linked to Maple Leaf cold cuts. By ruling in Maple Leaf's favour, the majority of the court found that no duty of care is owed by an exclusive supplier for purely economic losses suffered by franchisees with which the......
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Lapointe Rosenstein Marchand Melançon LLP | Canada | 24 Nov 2020

Cutting the red tape: recent amendments to Ontario's franchise disclosure act

In 2017 the Ontario government enacted the Cutting Unnecessary Red Tape Act with the objective of alleviating unnecessary regulatory burdens for businesses. The act provided for a series of proposed amendments to Ontario's franchise disclosure legislation and ultimately came into force on 1 September 2020. The amendments include measures to clarify the province's franchise laws and temper or......
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Lapointe Rosenstein Marchand Melançon LLP | Canada | 22 Sep 2020

Surprise! Rescission notice can be served in a pleading

Ontario's Arthur Wishart Act (Franchise Disclosure) requires franchisors to provide adequate pre-contractual disclosure to potential franchisees, failing which a franchisee may be entitled to rescind its franchise agreement. When properly invoked, rescission by a franchisee imposes extensive obligations on the franchisor. The Ontario Court of Appeal recently dealt with the issue of whether a......
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Lapointe Rosenstein Marchand Melançon LLP | Canada | 14 Jul 2020

'Special relationship' between franchisors and franchisees: could it give rise to a pre-contractual duty of good faith?

Common law jurisdictions recognise that certain circumstances could arise that would lead contracting parties to have some type of pre-contractual good-faith obligation, including where they have a 'special relationship' – typically characterised by an imbalance of information. A franchise arrangement has been characterised as an example of such a special relationship that could fall within......
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Lapointe Rosenstein Marchand Melançon LLP | Canada | 12 May 2020

Can good faith require parties to help each other properly exercise their rights?

It is well known that franchisors have been facing increasing pressure to conduct themselves in accordance with the principles of good faith. A recent Ontario Superior Court case has led to questions with respect to a franchisor's duty to protect its franchisee's right to operate in circumstances where the franchisor is the gatekeeper of rights with respect to a third party. In its decision,......
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Lapointe Rosenstein Marchand Melançon LLP | Canada | 28 Apr 2020

COVID-19 and the franchise landscape

While some franchised businesses have transitioned to working remotely and have ramped up their e-commerce business models in light of the COVID-19 pandemic, the vast majority of traditional franchised businesses are in a precarious state due to a drastic reduction in revenues and uncertain economic conditions for the foreseeable future. This article sets our practical tips and considerations......
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Lapointe Rosenstein Marchand Melançon LLP | Canada | 25 Feb 2020

Franchisee defaults: when is it 'material' enough?

Few areas of contract law have created as much confusion as the nebulous distinction between material breaches, substantial breaches and breaches going to the root of the contract. This distinction is important in a franchise context, where franchise agreements often provide that the franchisor has a right to terminate the franchise agreement for material breach by the franchisee, leaving......
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Lapointe Rosenstein Marchand Melançon LLP | Canada | 29 Oct 2019

Franchisees can't have their cake and eat it too: statutory disclosure exemptions have consequences

In recent years, many Canadian provinces have adopted franchise-specific disclosure laws with a view to remedying the inequality of bargaining power between franchisors and franchisees. Subject to certain limited exemptions, franchisors must provide prospective franchisees with full and accurate information in respect of all material facts relating to the franchise business before entering......
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