I bought a franchise in Ontario and the disclosure was wrong — can I rescind?
The Arthur Wishart Act gives a franchisee 60 days to rescind for deficient disclosure and two years where no disclosure document was ever delivered, with the franchisor required to buy back inventory and compensate losses.
Ontario franchisors must deliver a disclosure document at least 14 days before the franchisee signs anything or pays any consideration. The document must contain all material facts, financial statements and the prescribed certificates.
A franchisee may rescind within 60 days of receiving a document that is materially deficient, and within two years where no disclosure was delivered at all — or where the document was so incomplete that the law treats it as no disclosure. On rescission the franchisor must refund fees, buy back inventory and supplies, and compensate the franchisee for losses in establishing the franchise.
The Act also imposes a statutory duty of fair dealing and protects the franchisee's right to associate. Deadlines here are strict, so the disclosure package should be reviewed as soon as a problem is suspected.
Source: Arthur Wishart Act (Franchise Disclosure), 2000, S.O. 2000, c. 3
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