The Franchise Law Review: Canada


The Canadian franchise industry is fairly well developed, generating approximately C$100 billion every year. According to the Canadian Franchise Association (CFA), there are an estimated 1,300 franchise brands operating in Canada2 in most sectors of the economy, including restaurant, automotive, hospitality, real estate, professional services industries and many others, with 60 per cent of franchises operating in non-food sectors.3

CFA is a national trade association that represents both franchisors and franchisees. CFA publishes an annual Accomplishments Report, which includes an overview of the franchise market in Canada.4

The Province of Quebec has a unique legal environment, a mix of civil law and common law systems. Quebec is also predominantly francophone and has laws mandating the use of French in some aspects of business. It is also culturally distinct from other Canadian provinces. The Quebec Franchise Council is a provincial association representing the franchise industry in Quebec.

Market entry

i Restrictions

Generally, there are no restrictions on a foreign franchisor entering the Canadian market. Because of many similarities in business environment, culture, legal system and consumer preferences, franchisors from the United States often start their international expansion into Canada by unit franchising. Master franchising and area development arrangements are also common, particularly when expanding into Quebec.

It is not necessary for a foreign franchisor to establish a Canadian entity or branch. If a foreign franchisor decides to establish a local entity or acquire equity interest in a master franchisee or area developer, a notification to Innovation, Science and Economic Development Canada under the Investment Canada Act will be required. Significant foreign investment into a Canadian business may be subject to review and approval by the federal government; however, investments on this scale are not common in the franchise industry.

Franchisors in the food and restaurant industry may face unexpected restrictions with respect to the supply of some foods and beverages. Imports of milk, cheese, eggs and poultry to Canada are subject to high tariffs. The sale of alcohol is also subject to regulations that are more restrictive than regulations in most of Europe.

Franchisors and franchisees usually do not face restrictions on holding or leasing land, as restrictions mostly concern agricultural and cultural land. However, because of low vacancy rates in large urban centres, it may be challenging to secure a good location for a franchised unit. Canadian franchisors often try to lease the desired property and then sublet it to franchisees.

For franchisors who do not already operate in French, the cost of translating disclosure and marketing materials and the operations manual into French may be a barrier to entry to the Quebec market. There are also significant French-speaking populations in New Brunswick and the eastern part of Ontario.

ii Foreign exchange and tax

There are no foreign exchange restrictions in Canada.

The Canadian dollar trades freely and fluctuates against other currencies. Franchisors, depending on the complexity of their supply systems, may want to consider introducing protections against currency fluctuation, and warn potential franchisees of currency fluctuation risks. Franchisors may also want to consider discounts and other measures to remain competitive to Canadian consumers while the Canadian dollar is weak.

Initial franchise fees and royalties paid by a Canadian franchisee to a non-resident franchisor are subject to a 25 per cent withholding tax. The tax rate is reduced under some tax treaties. For example, the withholding tax rate under the tax treaties with the United States, Australia and the United Kingdom is 10 per cent.

Intellectual property

i Brand search

Canada is a first-to-use as opposed to first-to-file jurisdiction: trademark rights can be acquired through use, as well as through registration. Therefore, a search in the trademarks database alone is not sufficient; a broader search, including business names, corporate register and domain names, is recommended.

Given that Canada has two official languages, French and English, an English language trademark may be confused with a trademark in French and vice versa. Canadian courts held that the likelihood of a trademark being confused with another mark must be assessed through the eyes of an average francophone consumer, an average anglophone consumer or, in some instances, an average bilingual consumer.5 A trademark that is likely to be confused with another trademark in English or French will not be registered by the Canadian Intellectual Property Office.6

ii Brand protection

Even though common law rights in unregistered trademarks can be enforced in Canada, registration of a trademark significantly strengthens the level of protection and the value of the mark. Registration provides nationwide protection regardless of whether the mark is actually used in all parts of Canada.

Applicants from a World Trade Organization or a Paris Convention country can claim as a priority filing date the filing date of a foreign application if it was filed within six months prior to the Canadian application.

In June 2019, Canada acceded to the Madrid Protocol, the Nice Agreement and the Singapore Treaty. Franchisors from other Madrid Protocol countries are now able to file Canadian applications using the Madrid system. Foreign applicants are required to appoint a local agent to communicate with the Canadian Intellectual Property Office. The term of trademark registrations has been reduced from 15 to 10 years and colours, sounds, scents and textures are now registrable as trademarks if the applicant can show their distinctiveness. Canada no longer requires use of the trademark as a prerequisite to registration.

The process of registering a trademark can take approximately one year to 24 months if no oppositions are filed and the examiner does not raise significant objections. Oppositions and examiner's objections may delay registration significantly. It is therefore recommended to file trademark applications in advance of entering the Canadian market.

As Canada has two official languages, French and English, the registration or use of a mark in one language will to some extent protect the equivalent in the other language. However, translations may vary considerably according to a variety of factors. Where protection of the mark in the other language is clearly desired, it is prudent to apply for and register the mark in both official languages.

Starting from June 2019, when the 2014 amendments to the Trade-marks Act will enter into force, Canadian law will be harmonised with the Madrid Protocol, the Nice Agreement and the Singapore Treaty. Franchisors from other Madrid Protocol countries will be able to file Canadian applications using the Madrid system. Filing fees will be charged per class; therefore, franchisors with goods or services spanning a number of classes should take advantage of the current flat-fee structure. Among other significant changes, the term of trademark registrations will be reduced from 15 to 10 years and colours, sounds, scents and textures will be registrable as trademarks. The new law will eliminate the requirement that the trademark must have been used in Canada or abroad before registration.

On 5 November 2018, Canada acceded to the Hague Agreement Concerning the International Registration of Industrial Designs (also known as the Hague System) and harmonised its industrial design law with other jurisdictions.

Canada is a party to all major international treaties on copyright. Copyright can be registered, although it is not required. Registration of copyright will serve as evidence of ownership and will preclude an infringer from relying on a defence of 'innocent infringement' in court.

Canadian residents and corporations may register a '.ca' top-level domain. Non-resident owners of Canadian registered trademarks may also register a .ca domain name that represents or includes the exact word component of their Canadian registered trademark.7

iii Enforcement

Trademark rights can be enforced against an infringer by filing a lawsuit in the Federal Court or a provincial superior court. Common law rights in an unregistered trademark can be enforced by a common law claim of passing off, as codified by Section 7(b) of the Trademarks Act. Preliminary injunctions can be applied for, but are rarely granted. A successful party in the lawsuit may be awarded a permanent injunction, damages or an accounting of the infringer's profits from the infringement, the delivering up or destruction of infringing goods and litigation costs (to a certain extent).

The downside of trademark enforcement in Canada is that the judicial process is slow and expensive. The World Bank Group's Enforcing Contracts8 ranking puts Canada in 100th place, well behind Australia, China, the United States and the United Kingdom. In Quebec, the rules of civil procedure codified in the Code of Civil Procedure are different from those in common law provinces but generally would be more familiar to a common law practitioner than a civil lawyer, because of availability of discovery and other rules of common law civil procedure.

The Trademarks Act also establishes criminal liability for knowingly infringing a trademark on a commercial scale, punishable by a fine of up to C$1 million and imprisonment for up to five years.

Similarly, claims of copyright infringement can be filed with the Federal Court or, in some instances, a provincial superior court. It is not necessary to register copyright before filing a lawsuit. It is a criminal offence to knowingly infringe copyright, including by making copies, selling or distributing infringing copies, etc.

Know-how and confidential information should be protected by a contract between the parties.

iv Data protection, cybercrime, social media and e-commerce

Canada was an early adopter of privacy legislation that meets standards similar to those of the European Union. The Federal Personal Information Protection and Electronic Documents Act and provincial privacy statues in Alberta, British Columbia and Quebec regulate the collection, use and disclosure of personal information in Canada. The EU Commission has determined that Canada meets the 'adequate level of protection' standard for cross-border transfer of personal data between Canada and the EU.

Generally, non-governmental organisations in Canada are not required to store personal information within the country. The transfer of personal information abroad for data management or processing purposes is permissible if the transferring organisation retains control of personal data. In Alberta, the transfer of personal information abroad for processing requires prior notification to the individual; the federal Office of the Privacy Commissioner recommends that organisations advise their customers that their personal information can be processed in another jurisdiction.

In 2010, Canada adopted a federal anti-spam law (CASL)9 that requires organisations that send 'commercial electronic messages' within, from or to Canada to obtain a prior consent from a recipient. CASL also prohibits false or misleading online promotions and the installation of computer programs without consent. CASL establishes sanctions for non-compliance, including a charge of criminal offence for obstructing an investigation, administrative penalties of up to C$10 million and personal liability for an organisation's officers and directors. CASL's right of private action has been temporarily delayed.

Every province in Canada has adopted electronic commerce legislation that regulates transactions that occur in electronic form. Provided that certain requirements are met, online transactions and contracts concluded electronically are enforceable.

Franchise law

i Legislation

The regulation of franchising falls within the provincial jurisdiction. To date, six Canadian provinces have enacted franchise statutes: Alberta, British Columbia, Manitoba, New Brunswick, Ontario and Prince Edward Island (the Disclosure Provinces). The respective franchises acts (collectively, the Franchises Acts) of the Disclosure Provinces are fairly harmonised, but not identical.

Provincial franchise statutes focus on pre-contractual disclosure obligations and exemptions, the duty of fair dealing, the franchisees' right to associate, statutory right of damages, rescission rights and the jurisdiction of provincial laws and courts.

The Province of Quebec decided not to adopt franchise-specific legislation. Franchises in Quebec are governed by the Civil Code of Quebec, which imposes rules on many aspects of the franchise relationship, including in relation to pre-contractual disclosure, duty of good faith, franchise agreements, securities interests, leases, etc.

Quebec courts recognised that franchisors are subject to certain implicit obligations that flow from the franchise agreements, including an obligation to use reasonable efforts to 'protect and enhance the brand' (Dunkin' Brands Canada Ltd v. Bertico Inc, 2015 QCCA 624 (Dunkin' Donuts)). The Dunkin' Donuts ruling may also have implications for franchising beyond Quebec's borders.

ii Pre-contractual disclosure

In the Disclosure Provinces, a franchisor must provide a disclosure document to a prospective franchisee at least 14 days prior to entering into a franchise agreement or payment of a franchise fee. Although provincial franchise statutes in the Disclosure Provinces were based in part on franchise rules developed in the United States by the Federal Trade Commission and the states, Canadian franchise laws differ from the United States in one significant aspect. In the Disclosure Provinces, in addition to the prescribed information, franchisors must disclose all material facts that can impact the decision to buy a franchise.

Initially, franchisors often overlooked the requirement to disclose material facts. However, courts tend to give considerable weight to this requirement. As a result, failure to disclose material facts may have grave consequences for a franchisor, including rescission of the franchise agreement, refund of franchise fees, compensation of franchisees' losses or damages. This is particularly true in Ontario, where the Arthur Wishart Act (Franchise Disclosure) 2000 does not contain a 'substantial compliance' provision that may excuse a technical or minor non-compliance.

Information disclosed must be complete and accurate as of the date of the disclosure document (except for certain information, such as financial statements, which must be current as of the end of the most recent completed fiscal year).

Failure to provide disclosure, or delivery of incomplete or inaccurate disclosure gives the franchisee the right to rescind the franchise agreement, demand the return of its investment and claim damages. The rescission period for incomplete disclosure is 60 days, and two years from the date of the franchise agreement if no disclosure was provided or the disclosure was so deficient as to amount to no disclosure at all.

The Civil Code of Quebec imposes a duty of good faith on contracting parties.10 Courts have established that the duty of good faith under the Code requires a franchisor to inform the franchisee of any relevant information that might have a decisive impact on the prospective franchisee's decision to buy in.11 Failure to provide information to a prospect in Quebec may result in the reduction of certain obligations, rescission of the franchise agreement and a damages award.

iii Registration

There is no requirement to register the franchisor or the disclosure document in any province. Provincial corporate statutes require out-of-province corporations to register in the province when the foreign corporation starts to 'carry on business' in the province.

iv Mandatory clauses

There are no prescribed clauses that must be included in the franchise agreements.

v Guarantees and protection

Franchisors in Canada routinely require shareholders and directors or officers of the franchisee entity to personally guarantee the obligations of the franchisee under the franchise agreement.

Alberta's Guarantees Acknowledgement Act renders personal guarantees unenforceable unless the individual guarantor signs the guarantee before a lawyer.

The Civil Code of Quebec contains certain unique provisions applicable to guarantees, which will require revision of a common law standard guarantee agreement for use in Quebec.


i Franchisor tax liabilities

Taxes in Canada are levied at the federal, provincial and local levels. Federally, the imposition of tax is governed by the Income Tax Act and is administered by the Canada Revenue Agency (CRA). As a general rule, Canadian residents pay taxes based on their worldwide income and non-residents may be subject to Canadian taxes on income earned in Canada. Provincial and municipal governments have powers to levy local taxes, including provincial income tax, liquor and tobacco taxes and municipal property taxes. Taxation is a complex topic in Canada and professional tax advice must be sought before commencing franchise sales.

The tax liabilities of the franchisor depend on several factors, including whether the franchisor has or is deemed to have established a permanent presence in Canada. As noted above, it is not necessary for a foreign franchisor to establish presence in Canada to sell franchises, although having 'boots on the ground' may be beneficial for some franchisors. In very general terms, a 'permanent establishment' consists in having a Canadian branch, subsidiary, place of business or an agent with authority to sign agreements on behalf of the franchisor in Canada.

If the franchisor grants franchises in Canada without having presence in the country, and is not otherwise carrying on business in Canada, generally there will be no tax liability except for withholding taxes on the franchisor's royalty income, management fees and interest payments, payable by the franchisee (see Section II.ii).

A 15 per cent withholding tax is payable on service fees for services rendered in Canada and an additional 9 per cent if the services are rendered in Quebec. In certain circumstances, a waiver from the CRA may be obtained in respect of the service fee withholding tax. Some service payments may be considered royalties and be taxed accordingly if the payment is made for the use of trademarks or other intellectual property rights.

A non-resident franchisor may be liable to pay Canadian income taxes on income earned in Canada if the franchisor carries on business in Canada. The definition of 'carrying on business' is fairly broad and includes, among other things, packing or improving anything in Canada, whether or not for export, and offering anything for sale in Canada through an agent.

If the franchisor has presence in Canada that qualifies as a 'permanent establishment', the franchisor will be responsible for payment of the federal and provincial income taxes on income attributable to the Canadian business.

A Canadian subsidiary of a foreign franchisor is a Canadian resident and as such is responsible for payment of Canadian federal and provincial taxes.

ii Franchisee tax liabilities

The franchisee will be required to register with the CRA and obtain a business number, which will be used to open one or more accounts to remit sales taxes, payroll taxes, corporate income tax, etc.

The Canadian federal government collects a 5 per cent Goods and Services Tax (GST) on sales of goods and provision of services in Canada. In addition to the GST, other provinces (except Alberta) levy a provincial sales tax (PST) on the retail price of most goods. Businesses that sell taxable goods or services are responsible for collecting and remitting the tax. Some provinces have harmonised the PST with the GST, and the combined Harmonised Sales Tax (HST) is collected by the CRA. British Columbia, Manitoba, Quebec and Saskatchewan collect the PST separately.

Franchisees are also responsible for remitting withholding taxes (see Section II.ii and Section V.i).

iii Tax-efficient structures

There are a number of ways to structure franchising in Canada and the most tax-efficient option will depend on the franchisor's specific needs and circumstances.

For an international franchisor without presence and business operations in Canada, unit or master franchising may be the most tax efficient option. Tax liability of the franchisor will be limited to withholding taxes, which sometimes may be wholly or partially passed on to franchisees.

If a presence in Canada is desirable, franchisors may choose between operating as a branch or establishing a subsidiary in Canada.

Using a branch in Canada may allow the franchisor to deduct losses incurred by the branch from its home taxes. However, a non-resident franchisor will be subject to a branch tax at the same rate as the income tax rate for a foreign-controlled corporation. Branch tax is reduced under some tax treaties. Also, branch operation will not shield the parent entity from the debts and liabilities incurred by the Canadian operation.

The use of a local subsidiary corporation will limit a foreign parent's exposure to liability for debts and liabilities incurred by local operations. The subsidiary will be taxed on its net worldwide income, at a combined federal and provincial or territorial rate, which varies between 26 and 31 per cent. Dividends to the non-resident parent entity are subject to the withholding tax, subject to relief provided in some tax treaties.

Impact of general law

i Good faith and guarantees

Historically, Canadian common law did not recognise an overarching duty of good faith in contractual relationships. However, the Supreme Court of Canada in 2014 recognised12 that parties owe each other a duty to perform the contract 'honestly and reasonably and not capriciously or arbitrarily' and that the duty of good faith is a 'general organising principle' of contract law.

Unlike the duty of good faith embodied in the Civil Code of Quebec, Bhasin v. Hrynew does not create an obligation of franchise disclosure in common law non-Disclosure Provinces.

Disclosure Provinces impose a duty of fair dealing in the performance and enforcement of the franchise agreement. Failure to act in good faith will give rise to a right to claim damages against the breaching party.

ii Agency distributor model

The definition of a 'franchise' in the Disclosure Provinces may include product distribution franchises in addition to business format franchises. Certain agency and distribution arrangements (particularly automotive dealerships) fall under the definition of a 'franchise' in the Disclosure Provinces and therefore are subject to disclosure and other obligations imposed by the Franchises Acts. Alberta's Franchises Act specifically excludes purchase of a 'reasonable amount of goods at a reasonable bona fide wholesale price' from the definition of a franchise fee; wholesale purchases are also excluded in British Columbia, Manitoba, New Brunswick and Prince Edward Island, but not in Ontario.

Distribution agreements can generally be terminated upon reasonable notice. Canadian law does not require a manufacturer to provide compensation for goodwill to its distributor upon termination.

iii Employment law

Under provincial labour and employment laws, two or more companies may be treated as one employer if they are engaged in related business and are commonly controlled or directed. In some circumstances, franchisor may be deemed a 'related' employer of its franchisee's employees, giving rise to liability for employees' claims for wrongful dismissal, wage and overtime payments, collective agreements claims and even human rights complaints.

If the franchisor's operational control ties franchisees' business to the extent that they become economically dependent on the franchisor, including with respect to pricing for goods and services and ability to market to new customers, franchisees can be deemed franchisor's employees.13 Janitorial service franchisors can be particularly vulnerable to the risk of being recognised as employers of their franchisees because of their business model, in which the franchisor contracts with and collects payments directly from customers, remitting money to the franchisees after deducting franchisor's fees.

iv Consumer protection

Franchisees are not recognised as consumers under the provincial consumer protection laws. However, the Franchises Acts in the Disclosure Provinces are remedial legislation, intended to protect franchisees from the perceived imbalance of power in a franchise relationship; as such, the Franchises Acts are often interpreted and enforced in favour of franchisees.

Consumer protection in Quebec is governed by the Civil Code of Quebec and the Consumer Protection Act. To our knowledge, Quebec courts have not yet extended provisions of the Consumer Protection Act to franchisees; however, certain consumer protection provisions of the Civil Code of Quebec, such as rules applicable to contracts of adhesion, apply to franchisees.

v Competition law

The Federal Competition Act regulates restraints on trade such as price-fixing, exclusive dealing and refusal to deal. Serious anticompetitive activities, such as price-fixing between competitors and bid-rigging, are criminal offences. Vertical market constrains, such as territorial restrictions, resale price maintenance and exclusive dealing, are reviewable by the Competition Tribunal if they negatively affect competition, which is rare in the franchise industry as a negative effect on competition would require a significant market share.

vi Restrictive covenants

Both in-term and post-term non-competition restrictions are common in Canadian franchise agreements. Canadian courts held that, to be enforceable, non-compete restrictions must be reasonable, specific in terms of geographic boundaries, duration and scope of restrictive activities, and should not constitute an undue restriction on trade.

It is important to draft non-competition covenants carefully, as courts generally will not rewrite the clause to make it enforceable.

Non-solicitation clauses are viewed as a lesser restraint on a person's ability to make a living and may be easier to enforce than a non-competition clause.

vii Termination

Termination of a franchise agreement is governed by the contract's provisions, subject to the duty of fair dealing under the Franchises Acts, common law duty of good faith and duty of good faith under the Civil Code of Quebec.

A well-drafted franchise agreement should contain detailed provisions on the events that give rise to a right of termination. The takeover right of the franchisor in the event of abandonment of the franchise by the franchisee should also be reserved in the agreement.

The Civil Code of Quebec contains unique provisions on taking over security and leases.

viii Anti-corruption and anti-terrorism regulation

The Proceeds of Crime (Money Laundering) and Terrorist Financing Act establishes record-keeping and client identification requirements for certain businesses that are susceptible to being used for money laundering and the financing of terrorist activities (money services businesses, accountants, real estate brokers, dealers in precious metals and stones, etc.), and requires reporting of suspicious financial transactions.

The Corruption of Foreign Public Officials Act (CFPOA) creates a criminal offence of bribing a foreign public official. CFPOA may apply to non-Canadian persons if there is a 'real and substantial link' between the offence and Canadian territory; for example, where the offending organisation is registered in Canada.

ix Dispute resolution

Franchise disputes in Canada fall under the jurisdiction of provincial courts, unless the dispute involves purely a matter of federal jurisdiction (such as a trademark).

Generally, Canadian courts will extend comity and recognise a final foreign judgment rendered by a foreign court that had jurisdiction over the dispute. Canadian courts will recognise jurisdiction of a foreign court if it had 'real and substantial connection' to the dispute.

The Franchises Acts of the Disclosure Provinces do not allow the parties to restrict the application of the respective Franchises Acts or jurisdiction of provincial courts by agreement. Jury trials are not used in franchise disputes.

Recognising that judicial process in Canada is relatively slow and expensive, the Supreme Court of Canada encouraged the use of summary judgment proceedings and these are used, to a certain extent, in franchise disputes.

Damages awards in Canadian courts are generally less generous than in the United States. Punitive damages are rare. Damages in a contractual dispute will generally be awarded to place the non-breaching party in the position he or she would have been in had the contract been performed. The winning party may be awarded part of its legal costs.

Canada is a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Foreign and domestic arbitral awards will be recognised and enforced upon an application to the relevant provincial court. The Supreme Court of Canada in Sattva Capital Corp v. Creston Moly Corp, 2014 SCC 53 ruled that courts should show deference to arbitrators' decisions and apply the standard of reasonableness rather than a stricter standard of correctness when reviewing arbitral awards, except for matters of a 'pure question of law'. Mediation is also recognised and some franchise agreements require the parties to attempt to resolve the dispute by mediation before commencing arbitration or litigation. In New Brunswick, mediation is mandatory if one of the parties to the franchise agreement requests it.

Arbitration in Quebec is governed by the Code of Civil Procedure.

Current developments

In October 2019, the Supreme Court of Canada heard an appeal from the decision of the Court of Appeal for Ontario 1688782 Ontario Inc v. Maple Leaf Foods Inc, et al., 2018 ONCA 407. The Supreme Court's decision is expected to clarify whether an exclusive approved food supplier of a franchise system is liable to franchisees in tort for economic and reputational harm caused by product recall.

In 2018, the Court of Appeal for Ontario issued further guidance on distinguishing an imperfect disclosure from a disclosure so deficient as to amount to no disclosure at all (Raibex Canada Ltd v. ASWR Franchising Corp).14 This is particularly important because the courts have extended the two-year rescission remedy, available under provincial franchise statutes to franchisees who have not been provided with a disclosure document, to circumstances where disclosure was provided but is deemed materially deficient. The Court of Appeal clarified that imperfect disclosure should not automatically be considered to be 'no disclosure at all', as long as the deficiency did not deprive the franchisee of the possibility of making an informed decision. Still, franchisors should carefully review their agreements and disclosure documents to make sure that franchisees are informed about the uncertainties associated with each franchise offering so that the franchisee has an opportunity to make an informed investment decision.

Legalisation of cannabis nationwide on 17 October 201815 created an opportunity for cannabis producers and retailers to engage in franchising. Distribution and sale of cannabis is regulated provincially.

In November 2017, Ontario passed amendments to the Arthur Wishart Act; some of the amendments are not yet in force, pending adoption of the revised regulations. However, further amendments to the Act were recently recommended by the Business Law Modernization and Burden Reduction Council, including clarification on the acceptable accounting standards for financial statements included in disclosure documents, pre-disclosure deposits and disclosure exemptions.

The Court of Appeal for Ontario decisions in the Trillium Motor cases16 dealt with several issues arising in the franchising class action context, including whether out-of-province claimants are covered by the Ontario franchise statute, whether releases signed by franchisees are enforceable and whether a franchisor has a duty to facilitate the franchisees' right of association. The Court also held that a law firm that initially acted for the franchisees breached its duty of loyalty and conflict-of-interest obligations to them by simultaneously acting for another of the restructuring transaction parties.


1 Paul Jones is a principal and founder and Katya Logunov (Stepanishcheva) is an associate at Jones & Co.

2 Canadian Franchise Association, 2019 Accomplishments Report, available at:, at page 37.

3 2019 Accomplishments Report, note 2.

4 2019 Accomplishments Report, note 2.

5 Médicament v. Smithkline Beecham Corp, 2004 FC 811.

6 Trademarks Act, RSC 1985, c T-13, section 12(1)(d); Rose v. Fraternité Interprovinciale des Ouvriers en Electricité (1977), 32 CPR (2d) 42 (FC).

7 Canadian Internet Registration Authority, Canadian Presence Requirements for Registrants, Version 1.3, available at:

9 An act to promote the efficiency and adaptability of the Canadian economy by regulating certain activities that discourage reliance on electronic means of carrying out commercial activities, and to amend the Canadian Radio-television and Telecommunications Commission Act, the Competition Act, the Personal Information Protection and Electronic Documents Act and the Telecommunications Act, S.C. 2010, c. 23.

10 Code civil du Québec, CQLR c CCQ-1991, article 1375.

11 Bank of Montreal v. Bail Ltée, [1992] 2 SCR 554; 9150-0595 Quebec Inc v. Cora Franchises Inc, 2013 QCCA 531 at para. 18.

12 Bhasin v. Hrynew, 2014 SCC 71.

13 International Brotherhood of Teamsters v. Canada Bread Company Limited, 2017 CanLII 62172 (ON LRB).

14 Raibex Canada Ltd. v. ASWR Franchising Corp., 2018 ONCA 62.

16 Trillium Motor World Ltd. v. Cassels Brock & Blackwell LLP, 2017 ONCA 0544; Trillium Motor World Ltd. v. General Motors of Canada Limited, 2017 ONCA 0545.

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