FRANCHISING - Disclosure requirements - Remedies - Rescission

Law360 Canada ( February 16, 2018, 8:33 AM EST) -- Appeal by ASWR from summary judgment granted in favour of Raibex. The parties entered a franchise agreement giving Raibex the right to acquire and operate a wings and ribs franchise. Neither the agreement nor the franchise disclosure document specified a site for the franchise. The agreement stipulated that a suitable location would be selected through reasonable best efforts by both parties. The disclosure document included an estimated range of costs for constructing an operating site from a shell, but did not provide cost estimates for converting a pre-existing restaurant, leading to a dispute between the parties. Raibex purported to rescind the franchise agreement on the basis of material non-disclosure. ASWR sought judgment for costs associated with taking over the restaurant following receipt of the notice of rescission. A summary judgment motion judge held that the franchise agreement had been validly rescinded due to the inadequacy of the disclosure document, and dismissed ASWR's claims for damages. ASWR appealed. Raibex cross-appealed the motion judge's refusal to invalidate the disclosure certificate or to award it damages for misrepresentation and breach of the duty of fair dealing....
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