By Peter VanVliet Snell
Throughout the evolution of franchise disclosure legislation and case law in Canada, the disclosure of financial performance representations and earnings projections to franchisees has been an ever-present topic. In considering franchise opportunities, franchisees invariably want to know – “how much will I make?” This invites the franchisor to discuss possible future earnings, and present financial information.
However, if there is a break down in the franchisor-franchisee relationship, franchisees typically point to those same earnings projections and change the question to “why didn’t I make that much?” Earnings claims are often the first place where a disgruntled franchisee will look to allege there was some misrepresentations or improper disclosure by the franchisor.
