When approached with preparedness, renewal negotiations can offer the opportunity to retain a great franchisee and adapt the terms of the parties’ agreement to reflect evolving priorities and changing industry conditions, or, if the arrangement is no longer fruitful, amicably conclude the business relationship.
On September 14, 2017, the Ontario Government introduced Bill 154, the Cutting Unnecessary Red Tape Act, 2017, which includes the amendments to the Arthur Wishart Act (Franchise Disclosure), 2000 (the “Wishart Act”) that were recommended by the Ontario Business Law Advisory Council in its Fall 2016 Report.
Disruptive technology has hit the restaurant industry in recent years, expanding the range of options for consumers to order their favourite meal in a fast and convenient way. Third party delivery apps offer restaurants the ability to outsource delivery, increase online promotion, provide more convenient options to consumers, and potentially increase revenues.
Food order and delivery apps are rising in popularity. Most are familiar with names such as UberEats, Foodora, and Doordash. Just recently, McDonalds partnered with UberEats to offer food delivery services to customers. Many restaurant franchise systems are encouraging or exploring the use of food delivery apps, in large part because they represent a new revenue source previously unavailable to all except the few who invested heavily in home delivery infrastructure.
Franchisors go to great lengths to develop their systems. They then spend significant resources to commit their processes and expectations to writing in the form of franchise agreements and manuals. Most franchisors dedicate many days and often weeks to ensuring franchisees are trained in the system before opening their businesses to the public. Compliance with these agreements and manuals is fundamental to the success of the system.