The recent decision in New Vision Renaissance MX Ltd. v. The Symposium Café Inc. confirms that Ontario courts will uphold the terms of appropriately crafted releases in the context of the Arthur Wishart Act (Franchise Disclosure), 2000 (the “AWA”). Moreover, the Court rejected the argument that the Tutor Time exception is limited to the release of claims that are specifically the subject of the dispute or to releases given at the end of a franchise relationship. Releases will be effective if given as part of a settlement of a dispute or potential dispute where the franchisee has knowledge of the matters being released and has legal advice in respect of the settlement.
Beyond finding that the release in this case was valid and enforceable, the Court also went on to state by way of obiter that the “piecemeal” disclosure by the franchisor did not prevent the franchisee from making an informed investment decision. The New Vision case supports the recent string of decisions that assess rescission claims based on the impact of a disclosure deficiency to a franchisee’s investment decision.
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