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Druxy's

DRUXY′S® franchisees operate quick service deli-style restaurants.
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Featured Case

A brief summary as to what this case means for you:

Franchisors should make sure that they have the appropriate staff and procedures in place to ensure that their franchise disclosure document contains necessary information, and is up-to-date, but also that they have procedures in place to ensure that the mandated procedures to effect proper disclosure according to provincial law.

Hi Hotel Limited Partnership v. Holiday Hospitality Franchising Inc.,

2007 ABQB 686 (CanLII)

The principle issue in this case was whether the disclosure provided by the franchisor substantially complied with the disclosure requirement of the Alberta Act. It was found that although the overall scope and content of the disclosure provided was unclear, the disclosure document did not include a signed and dated certificate of the franchisor. The court found this to constitute disclosure that was not substantially compliant with the Alberta Act, even though the franchisee could not clearly establish what he had received by way of disclosure, and admitted that whether the mandatory certificate was signed or not was immaterial to his decision to purchase, especially following his extensive due diligence. [Editorial note: As a close observer of the franchise sector in Canada and around the world for almost 25 years, allow me to express the hope that this case represents the nadir of franchising in Canadian jurisprudence; the end of the swing, if you will, of the pendulum in favour of the extreme protectionism—to the point of absurdity—of franchisee rights, at the expense of a more balanced approach (represented in part by the US philosophy of "no harm, no foul") that places obligations upon franchisees to play a role in investigating the investment opportunity and to take responsibility for their investigation (or lack thereof), and to remove franchise legislation from the realm of the absolute liability offence status to which a reactionary judiciary has relegated it].

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