Franchisor, to prepare or not to prepare the prospective operating accounts of the prospective franchisee? That is no longer the question

Published on LexisNexis– La Semaine Juridique – Entreprise et Affaires, February 2025

Contract Law for special contracts sets out the pre-contractual obligation of the franchisor to provide information to the prospective franchisee; this obligation covers a limited list of items, which does not include projected operating accounts.

However, there are numerous disputes between franchisors and franchisees concerning the franchisee’s projected operating accounts, particularly in the event of the franchisee’s bankruptcy.

This article reviews the approach taken by judges in ruling on this type of dispute and the impact of the common law duty to disclose information resulting from the 2016 Contract Law reform on the decisions rendered.