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ontario regulation 69/04

made under the

arthur wishart Act (franchise disclosure), 2000

Made: February 4, 2004
Filed: March 22, 2004
Printed in The Ontario Gazette: April 10, 2004

Amending O. Reg. 581/00

(General)

1. Ontario Regulation 581/00 is amended by adding the following section:

0.1  For the purposes of the Act,

“franchisor’s agent” means a sales agent of the franchisor who is engaged by the franchisor’s broker and who is directly involved in the granting of a franchise.

2. Paragraph 6 of section 2 of the Regulation is revoked and the following substituted:

6. Details of any bankruptcy or insolvency proceedings, voluntary or otherwise, any part of which took place during the six years immediately preceding the date of the disclosure document, against any of the following persons as debtors:

i. The franchisor or the franchisor’s associate.

ii. A corporation whose directors or officers include a current director, officer or general partner of the franchisor, or included such a person at a time when the bankruptcy or insolvency proceeding was taking place.

iii. A partnership whose general partners include a current director, officer or general partner of the franchisor, or included such a person at a time when the bankruptcy or insolvency proceeding was taking place.

iv. A director, an officer or a general partner of the franchisor in their personal capacity.

3. (1) Clause 3 (1) (a) of the Regulation is amended by striking out “operations” at the end and substituting “operations, prepared in accordance with the generally accepted auditing standards set out in the Canadian Institute of Chartered Accountants Handbook”.

(2) Clause 3 (1) (b) of the Regulation is amended by striking out “the most recently completed year” and substituting “the most recently completed fiscal year”.

4. (1) Paragraph 1 of section 6 of the Regulation is amended by striking out “and operation” in the portion before subparagraph i.

(2) Subparagraph 1 ii of section 6 of the Regulation is amended by striking out “things” and substituting “tangible and intangible property”.

(3) Subparagraph 1 iii of section 6 of the Regulation is amended by striking out “associated with the franchise” and substituting “associated with the establishment of the franchise”.

(4) Paragraph 16 of section 6 of the Regulation is amended by striking out “the previous three years” in the portion before subparagraph i and substituting “the three fiscal years”.

5. (1) Paragraphs 1, 2 and 3 of section 11 of the Regulation are revoked and the following substituted:

1. The net worth of the franchisor on a consolidated basis according to its most recent financial statements that have been audited or for which a review engagement report has been prepared,

i. is at least $5,000,000, or

ii. is at least $1,000,000, if the franchisor is controlled by a corporation whose net worth on a consolidated basis according to its most recent financial statements that have been audited or for which a review engagement report has been prepared is at least $5,000,000.

2. The franchisor,

i. in the five years immediately preceding the date of the application, has at least 25 franchisees engaging in business at all times in Canada,

ii. in the five years immediately preceding the date of the application, has fewer than 25 franchisees engaging in business at all times in Canada and has at least 25 franchisees engaging in business at all times in a single jurisdiction other than Canada,

iii. does not meet the requirements of subparagraph i or ii, but is controlled by a corporation that meets the requirements of subparagraph i, or

iv. does not meet the requirements of subparagraph i or ii, but is controlled by a corporation that meets the requirements of subparagraph ii.

3. The franchisor,

i. has engaged in the line of business associated with the franchise continuously for not less than five years immediately preceding the date of the application, or

ii. is controlled by a corporation that meets the requirements of subparagraph i.

(2) Subparagraph 4 i of section 11 of the Regulation is amended by adding “or iii” after “2 i”.

(3) Subparagraph 4 ii of section 11 of the Regulation is amended by adding “or iv” after “franchisor described in subparagraph 2 ii”.