First Reported Decision Under New Brunswick’s Franchises Act on Disclosure Document Fatal Flaws

In the first reported decision under New Brunswick’s Franchises Act, R-SNB 2014, c. 111 (the “Act”), Alphataho Inc., et al v Maaco Canada Partnership LP, et al (“Alphataho v Maaco”),[1] the Court of Queen’s Bench of New Brunswick held that the failure to include statute-compliant financial statements in a franchise disclosure document (“FDD”) entitled the franchisee to avail itself of the 2-year rescission remedy available under the Act. The Court relied heavily on jurisprudence from Ontario in reaching its decision that this deficiency rose to the level of a “fatal flaw” in terms of franchise disclosure under the Act.

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This article is published to inform clients and contacts of important developments in the field of franchise and distribution law. The content is informational only and does not constitute legal or professional advice. We encourage you to consult a McMillan lawyer if you have specific questions or concerns relating to any of the topics covered here.