franchise law

Franchise Agreement: Arbitration Clauses

Every franchise is governed by a contract between the licensor; the franchisor; a licensee; and the franchisee. These contracts are called Franchise Agreements. With franchise businesses accounting for 40% of all retail sales in Canada through 78,000 franchise units, mediation and arbitration clauses are becoming increasingly prevalent. While these franchise agreements may offer significant advantages in some disputes, they may be inappropriate or even increase the complexity, time and cost in other scenarios. Here’s what you need to know about arbitration to determine if it is an appropriate franchise agreement for your business.

Franchise arbitration is one of many clauses that can provide advantages during in-court litigation proceedings. An arbitration clause is a stipulation in your franchise agreement that requires the parties to resolve their disputes through arbitration, outside of court. The outcome of a dispute is decided by one or more persons (“arbitrators”, “arbiters” or “arbitral tribunal”), which renders the “arbitral award”. An arbitral award is legally binding on both sides and enforceable in the courts. A significant advantage of arbitration is the choice of arbitrator and the opportunity to specify that the arbitrator must be experienced in arbitrating franchise disputes.

However, disputes over the arbitration clause or agreement, especially over the enforceability of certain provisions or the choice of arbitrator, can prove costly and time consuming. In these cases, the complications often negate the expected advantages of these franchise agreements, since they are designed to be a quick resolution of a dispute. Law Works Waterloo specializes in franchise law and offers a variety of solutions to franchise disputes.

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Franchise agreement for Tim Horton's top franchises in Canada

Franchise Agreements: The Top 5 Franchises in Canada

If you are thinking about purchasing a franchise, it’s important to ensure you thoroughly understand the franchise agreement prior to making a decision. A franchise agreement is a legally binding contract which details the franchisors terms and conditions for the franchisee. Canada is home to many top franchises, so it’s important to evaluate your options.

To help with your decision-making process, here are 5 of the top franchises in Canada:

Tim Hortons

A Canadian coffeehouse favourite, Tim Hortons was founded in 1964 in Hamilton, Ontario and has grown into the largest quick service restaurant chain in Canada with over 3,600 stores nationwide. The franchise is headquartered in Oakville but restaurants can now be found in the United States, the United Kingdom, Ireland, and the United Arab Emirates.

Mr. Sub

This popular sandwich shop was actually founded in Toronto’s Yorkville neighbourhood in 1968 and has grown to include 317 units.

Second Cup

Though Second Cup has not grown as large as Tim Hortons, the niche coffee chain has certainly established a following. Headquartered in Mississauga, Second Cup was founded in 1975 and now has over 360 store locations.

Pizza Pizza

For many Canadians, Pizza Pizza has grown into somewhat of a Friday night tradition. The chain was founded in 1967 in Toronto and now has over 700 units spread throughout Quebec, Ontario, Nova Scotia, and Western Canada.

Canadian Tire

Founded in 1922, Canadian Tire is the only retail franchise to make the list. With over 350 locations, the brand has certainly become a “go-to” for various automotive items, home goods, and sport and leisure products.

If you have questions about your franchise agreement or have become involved in a franchise dispute, contact Law Works in Mississauga.

 

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3 Tips to Selecting the Right Lawyer for You

There are many steps and processes involved in legal cases and trying to navigate them, on top of daily responsibilities can be overwhelming. Making sure you have the best representative for you and your needs is of key importance. When it comes to selecting a lawyer consider these 3 steps to help make your decision:

Select a Lawyer with Particular Expertise

Selecting a representative who has expertise in the area your case involves will be the best support system because they understand your needs and can best represent you and your case.

Research Potential Lawyers

Your local bar association will provide you some insight, as you will be able to find public records of complaints and disciplinary actions taken. There are also online sites that provide reviews but make sure to check more than one in case of bias.

Check their Website and Arrange Consultations

A lawyer’s or law firm’s website will have specific information on the type of law the attorney practices, as well as reference their years of practice and any achievements. Once you have selected a few top ones, set up consultations to get a feel for their style and take notes to refer back to.

These 3 steps are a brief guideline in how to begin the process of selecting a lawyer but the key is selecting a lawyer with expertise in your particular case. If you require a franchise lawyer in Mississauga than Law Works an expert in Franchise law is the firm for you.

franchise dispute Vaughan

How To Handle Franchise Disputes

Disputes used to be dangerous for those involved: both individuals fought to defend their honour with a sword or pistol and this type of resolution clearly marked one the winner and the other the untimely loser.

Luckily today, the mitigation of disputes is not life threatening but this does not mean that it goes without potential harm; as any dispute, especially a business one, can impact the livelihood of those involved. Franchise disputes in particular can arise for many reasons: if a franchisee feels they are not receiving value from a franchisor; a franchisee looks at ways of selling products outside the franchise system; when or if a franchise fails.

These are some of the potential disputes that can arise in the franchise system, and despite the sometimes volatile nature of broken trust or economic loss, it is important for both parties to seek resolution over a fight. If a commercial resolution is not possible, nor is mediation, than arbitration or litigation may be the answer.

When dealing with a franchise dispute in Vaughan, Law Works is a business and franchise regional law boutique with expertise in: franchise law, international and ‎domestic business disputes and arbitration in niche industries. In both scenarios of franchise litigation and franchise arbitration, Law Works represents parties through the entire process (initial assessments, drafting pleadings, representing on all steps including final hearing). If you find yourself in a franchise dispute in Vaughan, contact Law Works to ensure you have the most capable experienced team representing you.

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What It’s Like To Be In A Franchise Dispute

Before becoming an owner of a  franchise, I think it is important to know everything I can about possible problems and issues that may arise over time. A friend of mine in the franchise business recently had to deal with a franchise dispute in Mississauga, so I felt it was necessary I learn about what’s involved in case if I ever experience something similar.  

This is what I found out about a franchise dispute in Mississauga:

Franchise agreements are complex, commercial contracts, and because of this, franchise disputes arise frequently. Disputes often arise when a franchisee feels that he/she is of more value than the franchisor is compensating them for, and then chooses to find ways of working or selling the products outside of the system. These issues also arises sometimes if a franchisee fails and feels that part of the failure is due to neglect/lack of support from the franchisor.

In either cases, the ideal solution is a commercial solution rather than a fight in court. If this is the decided action, it is important to have a mediated between both parties.

When it came down to the franchise dispute, it was very important that my friend had contacted Law Works to represent them in their franchise dispute Mississauga. Law Works assisted them with all their questions and needs, and they had a positive experience with the lawyers who communicated with them all of the important details as the process moved along.

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Getting to Know Franchise Law in Ontario and How It Works

Did you know that there are only two provinces in Canada with legislation specifically intended to govern parts of franchising? Ontario and in Prince Edward Island.  In Ontario, it is the Arthur Wishart Act (Franchise Disclosure), administered by the Ontario Ministry of Consumer and Business Services, which legally define business “franchise.” This means, that many franchise agreements between distributors and dealers are protected by the Act’s requirements.  

The Act is intended to provide a franchise agreement, fair dealings and honest business practices between the parties involved. Specifically, this regards the Disclosure Document that franchisors are required to provide to potential franchisees. The Disclosure Document must be accompanied with the proposed franchise agreement in order for the agreement to be valid, including financial statements, and all other material facts. The Disclosure Document must also contain a certificate that states that the Disclosure Document does not contain any misrepresentation.

franchise lawyer Vaughan

As a potential franchisee considering the terms of a new franchise agreement, it could get too complicated for you to handle on your own. Getting a franchise lawyer who can help you understand exactly what you’re getting into and will protect your best interest is very important for protecting such a big investment.  Your attorney can explain what your rights and obligations under the agreement would be, negotiate on your behalf, and help you draft a revised agreement if needed.  

If you’re considering buying a franchise in Vaughan or the Greater Toronto Area, contact the experienced franchise lawyers at Law Works. Where you are connected with a team of franchise support professionals to guide you on your path to owning your own successful franchise.

 

How Franchise Disputes Are Like Romeo & Juliet

“Go wisely and slowly. Those who rush stumble and fall.” Shakespeare wrote this line for his masterpiece, Romeo and Juliet. The Montagues and Capulets were two of Verona’s noble families, and their distaste for one another grew to extremes when the ruler of Verona, Prince Escalus decreed death for any individual who disturbed the peace in the future. As in any Shakespearean tragedy, the two young lovers hail from these two families; and it is forbidden that they should be together. Many of us know how this story ends: with a “parting that is such sweet sorrow” and an end to the Capulet and Montague feud.

Now, this type of dramatic storytelling can only take place upon the stage, but at times the dealings of business can take on a plot similar to a Shakespearean tragedy. As Shakespeare wrote, to go wisely and slowly is best as to not rush and fall. The business of franchises can at times be a battle between two, or sometimes more households, and it is wise to take heed of the words Shakespeare wrote.

In the unfortunate circumstances of franchise disputes, one should look for their own “Prince Escalus.” Someone to help navigate disputes and do so in a way that is slow and wise. Law Works is an expert in franchise dispute in Mississauga. Founded in 2012 the firm is a business and franchise regional boutique that can help you with any franchise dispute in Mississauga. Contact Law Works Mississauga today! And get your feud resolved quickly and fairly.