Raibex: An AllStar Decision for Franchisors

7 Min Read By Geoffrey B. Shaw and Christopher Horkins

On January 25, 2018, the Ontario Court of Appeal released the closely followed decision in Raibex Canada Ltd. v ASWR Franchising Corp. providing much needed clarity on the pre-contractual disclosure obligations imposed on franchisors under the Arthur Wishart Act (Franchise Disclosure), 2000 (the Wishart Act).

The Raibex decision is good news for franchisors because it provides clarity and restores commercial sense to the disclosure requirements under the Arthur Wishart Act.

The Raibex decision is good news for franchisors because it provides clarity and restores commercial sense to the disclosure requirements under the Arthur Wishart Act. It confirms that the severe remedy of rescission within two years of signing franchise agreement is reserved only for situations where the disclosure is so deficient that it is tantamount to receiving no disclosure at all. That will only be the case if the franchisee is effectively deprived of their ability to make an informed investment…