Franchise Law is a trap for the unwary lawyer. Given the broad definition of “franchise” under franchise legislation, an unwary lawyer may not identify that a commercial transaction is in substance a “franchise”, which may then impose a disclosure obligation on the party deemed to be a “franchisor”. Secondly, the preparation of a valid disclosure document, and the circumstances in which a disclosure document must be delivered, are increasingly complex. The consequences of getting it wrong can be significant, not only to the public, the client, and to various individuals related to the client, but also for the lawyer. According to LawPRO’s most recent statistics the average dollar value of a negligence claim against lawyers in franchise matters was approximately five (5) times the claim value in almost every other area of law.
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