O. Reg. 199/05: GENERAL

 

ontario regulation 199/05

made under the

arthur wishart act (Franchise disclosure), 2000

Made: May 4, 2005
Filed: May 6, 2005
Printed in The Ontario Gazette: May 21, 2005

Amending O. Reg. 581/00

(General)

1. (1) Clauses 3 (1) (a) and (b) of Ontario Regulation 581/00 are revoked and the following substituted:

(a) an audited financial statement for the most recently completed fiscal year of the franchisor’s operations, prepared in accordance with generally accepted auditing standards that are at least equivalent to those set out in the Canadian Institute of Chartered Accountants Handbook;

(b) a financial statement for the most recently completed fiscal year of the franchisor’s operations, prepared in accordance with generally accepted accounting principles that are at least equivalent to the review and reporting standards applicable to review engagements set out in the Canadian Institute of Chartered Accountants Handbook; or

(2) Clause 3 (1) (c) of the Regulation is amended by striking out “subsection 13 (1) or (2)” and substituting “subsection 13 (2)”.

2. (1) Section 11 of the Regulation is amended by striking out the portion before paragraph 1 and substituting the following:

11. Pursuant to subsection 13 (2) of the Act, a franchisor that meets the following criteria is exempt from the requirement to include the financial information described in clause 3 (1) (a) or (b) or subsection 3 (2) or (3) of this Regulation in a disclosure document, subject to the conditions set out in subsection (3):

(2) Subparagraph 2 i of section 11 of the Regulation is amended by striking out “the application” and substituting “the disclosure document”.

(3) Subparagraph 2 ii of section 11 of the Regulation is amended by striking out “the application” and substituting “the disclosure document”.

(4) Subparagraph 3 i of section 11 of the Regulation is amended by striking out “the application” and substituting “the disclosure document”.

(5) Paragraph 4 of section 11 of the Regulation is amended by striking out “In the ten years immediately preceding the date of the application” and substituting “In the five years immediately preceding the date of the disclosure document” in the portion before subparagraph i.

(6) Subparagraphs 4 i and ii of section 11 of the Regulation are amended by adding “including the Act” after “franchises” in each case wherever it appears.

(7) Section 11 of the Regulation is amended by adding the following subsections:

(2) Financial statements of a franchisor mentioned in paragraph 1 of subsection (1) shall,

(a) be prepared in accordance with generally accepted auditing standards that are at least equivalent to those set out in the Canadian Institute of Chartered Accountants Handbook, if the financial statements are audited; and

(b) be prepared in accordance with generally accepted accounting principles that are at least equivalent to the review and reporting standards applicable to review engagements set out in the Canadian Institute of Chartered Accountants Handbook, if a review engagement report has been prepared for the financial statements.

(3) An exemption described in subsection (1) ceases to be effective if,

(a) the franchisor ceases to meet the exemption criteria set out in paragraph 1 of subsection (1);

(b) the franchisor no longer meets any of the following conditions:

(i) the franchisor has at least 25 franchisees engaging in business at all times in Canada,

(ii) the franchisor 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) the franchisor does not meet the conditions of subclause (i) or (ii), but is controlled by a corporation that meets the conditions of subclause (i), or

(iv) the franchisor does not meet the conditions of subclause (i) or (ii), but is controlled by a corporation that meets the conditions of subclause (ii);

(c) the franchisor ceases to engage in the line of business associated with the franchise;

(d) in the case of a franchisor described in subparagraph 3 ii of subsection (1), the franchisor ceases to be controlled by a corporation that engages in the line of business associated with the franchise;

(e) in the case of a franchisor described in subparagraph 2 i or iii of subsection (1), a judgment, order or award relating to fraud, unfair or deceptive practices, or a law regulating franchises, including the Act, is made in Canada against any of the franchisor, the franchisor’s associates, and the directors, general partners and officers of the franchisor; or

(f) in the case of a franchisor described in subparagraph 2 ii or iv of subsection (1), a judgment, order or award relating to fraud, unfair or deceptive practices, or a law regulating franchises, including the Act, is made in Canada or in the single jurisdiction other than Canada referred to in subparagraph 2 ii of subsection (1) against any of the franchisor, the franchisor’s associates, and the directors, general partners and officers of the franchisor.

3. This Regulation comes into force on July 1, 2005.