Ontario Civil


Contracts

FRANCHISE AGREEMENTS
Plaintiff’s refusal to complete agreement confirmed failure to mitigate damages

Plaintiff franchisee claimed defendant franchisor failed to adequately disclose in writing details of franchisor’s plans and proposed renovation costs at time of renewal. Plaintiff refused to return to carry on business in usual fashion. Plaintiff claimed it suffered significant damages when defendant attempted to go ahead with renovations and allegedly terminated agreement before completion date. Defendant argued Arthur Wishart Act (Franchise Disclosure), 2000 (Ont.), had no application to renewal of franchise agreement. Defendant claimed original and renewal agreements set out plaintiff’s obligation to conduct extensive renovations at own cost when required by franchisor. Action was dismissed. Plaintiff understood with benefit of independent legal advice all of terms of original franchise agreement. There was no interruption of operation of franchisee’s business. Plaintiff was fully informed prior to entering original franchise agreement that franchise was in process of being renovated and cost was to be borne by franchisee under terms of agreement. There were no material changes that were to take place in renewal agreement as intention to proceed with renovations to plaintiff’s store and cost was already disclosed to plaintiff and included in original franchise agreement. Plaintiff led no evidence that defendant acted in bad faith towards plaintiff. Plaintiff’s refusal to return without any basis to complete agreement confirmed failure to mitigate damages.

1201059 Ontario Inc. v. Pizza Pizza Ltd. (Aug. 14, 2013, Ont. S.C.J., R.J. Nightingale J., File No. 11-24641) 231 A.C.W.S. (3d) 663.

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