Arthur Wishart Act Disclosure and Rescission Lawyers in Ottawa
Francis Mehr LLP acts for franchisees and franchisors in Ottawa and across Ontario on Arthur Wishart Act (Franchise Disclosure), 2000 issues. For other franchise disputes, see our franchise litigation page.
Four Clocks That Decide a Disclosure Case
Clock | What it is | Source |
|---|---|---|
14 days | Not less than 14 days before signing or paying, with the s. 5(1) exceptions. | s. 5(1) |
60 days | Rescind within 60 days of receipt if disclosure was late or did not meet s. 5. | s. 6(1) |
Two years | If the franchisor never provided the disclosure document, rescind no later than two years after entering into the franchise agreement. | s. 6(2) |
Franchisor's 60 days to pay | Refund, buy-back and compensation, within 60 days of the effective date. | s. 6(6) |
Notice must be in writing, delivered personally, by registered mail, by fax or by a prescribed method, at the franchisor's address for service or to a person the agreement designates (s. 6(3)). Effective dates:
Method | When the notice is effective | Source |
|---|---|---|
Personal delivery | The day it is delivered | s. 6(4)(a) |
Registered mail | The fifth day after mailing | s. 6(4)(b) |
Fax before 5 p.m. | The day it is sent | s. 6(4)(c) |
Fax at or after 5 p.m. | The next day | s. 6(4)(d) |
Prepaid courier | Deemed delivered on the second day after courier delivery | O. Reg. 581/00, s. 13(2) |
If a s. 6(4)(b), (c) or (d) day is a holiday, the notice is effective on the next non-holiday (s. 6(5)).
Is Your Disclosure Document Defective? A Self-Check
One document at one time, delivered as s. 5(2)–(3) and O. Reg. 581/00, s. 12 require.
All proposed agreements attached (s. 5(4)(c)).
Prescribed financial statements and opening statements, including that independent legal and financial advice should be sought (s. 5(4)(b), (d); O. Reg. 581/00, ss. 3–4).
Ad-fund, rebate, territory, proximity, exited-franchisee and current Ontario location information (O. Reg. 581/00, s. 6 paras. 6, 8, 12–17).
Certificate signed as O. Reg. 581/00, s. 7(2) requires.
Written material-change statement received as soon as practicable and before signing or paying (s. 5(5)); information set out accurately, clearly and concisely (s. 5(6)).
How to Rescind, Step by Step
Confirm the dates of receipt, signing and payment.
Identify the right: s. 6(1) (60 days from receipt) or, if no document was ever provided, s. 6(2) (no later than two years after entering into the franchise agreement).
Write the notice (s. 6(3)).
Deliver it by a permitted method and diarize the effective date (s. 6(4)–(5); O. Reg. 581/00, s. 13 for courier).
Diarize the franchisor's 60-day s. 6(6) obligations from the effective date.
Consider a court claim, including damages under s. 7, if the franchisor refuses.
What a Valid Rescission Recovers
Within 60 days of the effective date of the rescission, the franchisor or franchisor's associate shall (s. 6(6)) refund any money received from or on behalf of the franchisee, other than money for inventory, supplies or equipment; purchase remaining inventory and the supplies and equipment bought under the agreement, at the price the franchisee paid; and compensate the franchisee for any losses that the franchisee incurred in acquiring, setting up and operating the franchise, less those amounts.
For Franchisors: Disclosure That Holds Up
Deliver the document as one document at one time, personally, by registered mail or a prescribed method, including electronic delivery that meets O. Reg. 581/00, s. 12 (s. 5(2)–(3)). Information must be accurately, clearly and concisely set out (s. 5(6)). Sign and date the certificate as O. Reg. 581/00, s. 7(2) requires (the franchisor; the sole director or officer; or, for a corporation with more than one officer or director, 'at least two persons who are officers or directors').
Exemptions from s. 5 include certain resales, an additional franchise substantially the same as one already operated (with no material change), and the prescribed $15,000 and $3,000,000 initial-investment thresholds (s. 5(7); O. Reg. 581/00, s. 9(2)–(3)). The person claiming an exemption or exclusion must prove it (s. 12). See our franchise law page.
Other Remedies: Misrepresentation Damages, Fair Dealing and the Right to Associate
A franchisee who suffers a loss from a misrepresentation in the disclosure document or a statement of material change, or from any failure to comply with section 5, has a right of action for damages against the franchisor, its agent, broker and associate, and every person who signed the document (s. 7(1)). Every franchise agreement imposes on each party a duty of fair dealing in its performance and enforcement (s. 3(1)), which includes acting in good faith and in accordance with reasonable commercial standards (s. 3(3)). A franchisee may associate with other franchisees; the franchisor shall not interfere with, prohibit, restrict or penalize that right, and contrary provisions are void (s. 4(1)–(4)). A waiver or release of a right under the Act is void (s. 11). A clause restricting Ontario law or a forum outside Ontario is void on a claim otherwise enforceable under the Act in Ontario (s. 10).
Arthur Wishart Act Questions, Answered
How far ahead must a franchisor deliver the disclosure document?
The franchisor must deliver it, and the prospective franchisee must receive it, not less than 14 days before the earlier of signing the franchise agreement or another agreement relating to the franchise, and paying any money relating to the franchise. Agreements dealing only with confidentiality, use of information or choosing a site are generally excluded, as is a fully refundable deposit of no more than 20 per cent of the franchise fee, to a maximum of $100,000, paid under an agreement that does not commit the buyer to the franchise.
What is the deadline to rescind when disclosure was late or deficient?
60 days after receiving the disclosure document. That right applies if the disclosure document, or a statement of material change, was not delivered on time, or if its contents did not meet the Act's requirements. Rescission is without penalty or obligation.
What happens if the franchisor never delivered a disclosure document?
The franchisee may rescind the franchise agreement, without penalty or obligation, no later than two years after entering into it.
How is a notice of rescission delivered?
In writing, delivered personally, by registered mail or by fax to the franchisor's address for service or a person the franchise agreement designates, or by prepaid courier to that address for service.
What does the franchisor owe after a valid rescission?
Section 6(6) gives the franchisor, or its associate, 60 days from the effective date of the rescission to: refund 'any money received from or on behalf of the franchisee, other than money for inventory, supplies or equipment'; buy back the inventory still on hand and the supplies and equipment bought under the agreement, at the price the franchisee paid; and 'compensate the franchisee for any losses that the franchisee incurred in acquiring, setting up and operating the franchise, less' those amounts.
Can a franchisee sign away these rights?
No. Any waiver or release by a franchisee of a right under the Arthur Wishart Act, or of an obligation the Act imposes on the franchisor, is void.
Is rescission the only remedy for bad disclosure?
No. A franchisee who suffers a loss from a disclosure misrepresentation, or from any failure to comply with section 5, has a right of action for damages (s. 7(1)).
Does every franchise sale need a disclosure document?
No. The Act lists exemptions, including certain resales, an additional franchise substantially the same as one already operated, and prescribed investment thresholds (s. 5(7)). The person claiming an exemption or exclusion must prove it (s. 12).
Book a Consultation on a Disclosure or Rescission Issue
Book a consultation with the lawyers at Francis Mehr LLP: (613) 226-1011, or contact us.
Written by the lawyers of Francis Mehr LLP. Updated November 13, 2026. General information, not legal advice. Every franchise and every disclosure file turns on its own facts; get advice on your situation before you sign, pay or serve a notice.