The Arthur Wishart Act Explained: Ontario Franchise Law for a First-Time Franchisee

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The Arthur Wishart Act (Franchise Disclosure), 2000 is Ontario’s franchise law: a franchisor must give you a disclosure document at least 14 days before you sign any agreement about the franchise or pay the franchisor for it. If that document arrives late, is incomplete or never arrives, the Act lets you rescind the deal and recover what you paid.

The same Act gives both sides a duty of fair dealing, protects your right to organize with other franchisees, and voids clauses that try to sign those rights away. This guide walks through the Act and its regulation, O. Reg. 581/00, in the order a first-time franchisee meets them, with the section number for every rule.

What the Act is and where to read it

The Act is a short provincial statute, S.O. 2000, c. 3. Most of the detail sits in its regulation, O. Reg. 581/00, which sets the dollar thresholds, the deposit cap and the contents of the disclosure document. Both are published on e-Laws, Ontario’s official source for consolidated statutes and regulations. The versions in force today date from September 1, 2020, when amendments on deposits, confidentiality agreements and exemption amounts took effect.

The Act applies to a franchise agreement when the business is to be operated partly or wholly in Ontario (section 2(1)). Before the deal, it protects you as a “prospective franchisee”. After you sign, it protects you as a franchisee, and its fair-dealing duty binds the franchisor and you alike.

If you are comparing provinces, our guide to franchise laws in Canada by province sets Ontario next to the other provinces.

Is your deal a franchise? The three conditions

Everything else in the Act depends on the definition in section 1(1). Most franchises fall under clause (a), which needs three elements at the same time:

These are the “three conditions of a franchise agreement” people search for. The definition looks at what the arrangement does. A contract titled “licence” that carries all three elements fits the words of section 1(1). Our guide to franchising vs licensing works through that test with examples.

Take a kids program as an example. A brand that charges you, lets you run classes under its name and trains you on its curriculum and marketing meets all three conditions on the words of the Act, because training and marketing techniques are named examples of control or assistance.

The second branch: distribution plus location help

Clause (b) catches a different set-up. The franchisor grants you the right to sell or distribute goods or services supplied by the franchisor or a supplier it designates, with or without a trade-mark, and the franchisor or a third person it designates helps with location: securing retail outlets or accounts, or sites for vending machines, display racks or other product displays (s. 1(1), cl. (b)). The Act gives this branch no separate name, and an arrangement that meets it falls under the same definition of a franchise as clause (a).

What the Act does not cover

Section 2(3) lists relationships that stay outside the Act even when they look similar:

• an employer-employee relationship;
• a partnership;
• membership in a co-operative association, as prescribed;
• use of a mark that identifies a testing, evaluation or certification service offered to the public;
• a trade-mark licence to a single licensee, where it is the sole licence of its kind the licensor grants in Canada for that mark;
• a lease of space inside another retailer’s premises, where you are neither required nor advised to buy what you sell from that retailer;
• an arrangement based on an oral agreement with no writing that evidences any material term;
• a service contract or franchise-like arrangement with the Crown or a Crown agent.

For someone coming from teaching or childcare, the first item matters most. If a kids cooking business employs you as an instructor, that is an employer-employee relationship, and the Act does not apply to it. If you sign a written agreement to run the program under the brand and you pay for that right, go back to the three conditions above.

The 14-day rule

The core duty is in section 5(1). The franchisor must provide a disclosure document, and you must receive it, not less than 14 days before the earlier of two events:

1. you sign the franchise agreement or any other agreement relating to the franchise;
2. you, or someone on your behalf, pay any consideration relating to the franchise to the franchisor or its associate.

The clock runs from the day you receive the document. Fourteen days is the minimum; you can take longer before you decide.

Deposits before disclosure

One payment may come before the document: a deposit that meets all three tests in section 5(1)(b). It must stay within the prescribed amount, be refundable without any deductions, and be paid under an agreement that does not oblige you to sign a franchise agreement. The prescribed amount is 20 per cent of the fee paid for the franchise, up to $100,000 (O. Reg. 581/00, s. 7.1(1)). Ask for the refund terms in writing before you pay.

Confidentiality agreements

You may also sign one kind of agreement before disclosure. Under section 5(1.1), an agreement is allowed early when its only terms keep information confidential, forbid using that information, or designate a location, site or territory for you. Any other term in the same paper brings it back under the 14-day rule. Section 5(1.2) narrows the exception further: it is lost when a confidentiality or non-use term keeps covering information that has become public or has been disclosed without any breach of the agreement, and when a term forbids you to share information with a franchisee organization, other franchisees of the same system or your professional advisers.

How the document has to arrive

• As one document, delivered at one time (s. 5(3)), in person, by registered mail or by another prescribed method (s. 5(2)). The regulation allows electronic delivery when its conditions are met (O. Reg. 581/00, s. 12(1)).
• With all material facts, prescribed financial statements, copies of every proposed agreement you will be asked to sign, and the prescribed statements (s. 5(4)).
• Set out accurately, clearly and concisely (s. 5(6)).
• Followed by a written statement of any material change, as soon as practicable and before you sign or pay (s. 5(5)).

The regulation also requires the document to say at its start that you should get independent legal and financial advice before entering the agreement (O. Reg. 581/00, s. 4). For a section-by-section list of what to look for inside the document, use our franchise disclosure document checklist.

Exemptions: when no disclosure document is required

Section 5(7) lists cases where section 5 does not apply. An exemption switches off the disclosure duty only. Fair dealing (section 3) and the right to associate (section 4) still apply. Here is the full list:

Who has to prove an exemption? Under section 12, the burden of proving it is on the person claiming it. If a franchisor tells you no disclosure is needed because the deal is small, ask how it calculated your total initial investment, item by item, against section 9(1) of the regulation.

If disclosure was late, deficient or missing

This is where the answer to “can you break a franchise agreement” comes from. Section 6 gives you a right to rescind, without penalty or obligation, in two situations:

• Within 60 days after you received the disclosure document, if it or a material-change statement arrived later than section 5 requires, or if its contents did not meet section 5 (s. 6(1)).
• Within two years after you entered into the agreement, if the franchisor never provided a disclosure document (s. 6(2)).

The notice of rescission must be in writing and delivered to the franchisor in person, by registered mail, by fax or by another prescribed method, at its address for service or to the person the agreement designates (s. 6(3)). It takes effect on the day of personal delivery, on the fifth day after mailing, or, for a fax, on the day it is sent before 5 p.m. and the next day if sent later (s. 6(4)); if that day is a holiday, the notice takes effect on the next day that is not a holiday (s. 6(5)). The regulation also allows delivery by prepaid courier to the franchisor’s address for service in the franchise agreement (O. Reg. 581/00, s. 13(1)).

What the franchisor must pay back

Within 60 days of the effective date of rescission, the franchisor or its associate must (s. 6(6)):

1. refund any money it received from you or on your behalf, other than money for inventory, supplies or equipment;
2. buy back the inventory you bought under the agreement and still hold, at the price you paid;
3. buy back the supplies and equipment you bought under the agreement, at the price you paid;
4. compensate your losses in acquiring, setting up and operating the franchise, less the amounts above.

Damages and deemed reliance

If you suffer a loss because of a misrepresentation in the disclosure document or a material-change statement, or because the franchisor failed to comply with section 5, you can sue for damages. The claim can name the franchisor, its agent, its broker, its associate and every person who signed the document (s. 7(1)). You are deemed to have relied on the misrepresentation, so you do not have to prove that you relied on it (s. 7(2)). A defendant avoids liability for a misrepresentation if it proves that you acquired the franchise knowing about the misrepresentation (s. 7(4)).

Outside these situations, whether you can leave a franchise agreement early depends on its own terms and on general contract law. The Act’s rights add to any other remedy you have at law (section 9). Talk to a franchise lawyer before you stop payments or close the doors.

Your rights once the business is running

• Fair dealing. Every franchise agreement imposes on each party a duty of fair dealing in its performance and enforcement, which includes acting in good faith and in line with reasonable commercial standards (s. 3(1), 3(3)). A party that breaches it can be sued for damages (s. 3(2)).
• Right to associate. You may associate with other franchisees and form or join a franchisee organization. The franchisor may not interfere with, prohibit or restrict this, and contract terms that try are void (s. 4(1), 4(2), 4(4)).
• Ontario law and Ontario courts. A clause that restricts the application of Ontario law, or moves jurisdiction or venue outside Ontario, is void for claims enforceable under the Act in Ontario (s. 10).
• No waiver. A waiver or release by a franchisee of a right under the Act is void (s. 11).

A practical timeline for a first-time franchisee in Ontario

1. Expression of interest. You apply or ask for information. Brochures and information packages are useful reading; the disclosure document is a separate, formal item under section 5.
2. Confidentiality agreement. The franchisor may ask you to sign one before sharing details. Check that it contains only the terms section 5(1.1) allows.
3. Deposit, if any. Confirm in writing that it is fully refundable without deductions, that it does not bind you to sign, and that it stays within 20 per cent of the fee paid for the franchise, up to $100,000.
4. Disclosure document arrives. Write down the date you received it. That date starts the 14 days and, if something goes wrong later, the 60-day rescission window.
5. Review. Read it with a franchise lawyer and an accountant. The regulation’s own required statement encourages you to contact current and former franchisees before signing (O. Reg. 581/00, s. 4).
6. Material changes. Any material change before you sign or pay must reach you as a written statement.
7. After the 14 days. Sign the agreement or pay for the franchise only once the 14-day period has fully run, and ask your lawyer to confirm the earliest date. Keep the full document and every statement you received.

Our disclosure document checklist turns step 5 into a list you can work through with your advisers.

Where Cookiddoo fits

Cookiddoo is an Ottawa kids cooking business. It runs mobile cooking birthday parties at families’ homes, school and daycare workshops and the Junior Chef Academy course for ages 8 to 13. School and daycare sessions run in English or French.

Cookiddoo accepts expressions of interest from people who want to bring its programs to their city, and the process follows the order of this guide. You apply, Cookiddoo reviews whether your market and background fit, and it sends an information package. Any disclosure document your province requires comes before any agreement or payment. For a wider view of the category, read kids cooking class franchises in Canada, or request the Cookiddoo franchise information package.

This guide is general information based on the Act and O. Reg. 581/00 as published on e-Laws on October 26, 2026. It is not legal advice. Have a franchise lawyer review your disclosure document and agreement before you sign or pay anything.

What Ottawa parents say

4.6★★★★★29 reviews on Google

We visited Cookidoo off-site class and my kids had the greatest time ever! They made chocolate cookies from scratch!

The cooking instructor was patient, kind and did an amazing job teaching the children (ages 4 to 8) and they enjoyed learning to make pizza as well as eating it.

The cooking class was fun, engaging, and organized for the kids. The instructors were patient, enthusiastic, and made every child feel included.

Read all reviews on Google →