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Fact Scenario: Jim Jorton's Ltd. {Jimmy's} is a Franchisor of a fast-food franchise chain in Ontario. It has 30 locations across Ontario specializing in the
Fact Scenario: Jim Jorton's Ltd. {Jimmy's} is a Franchisor of a fast-food franchise chain in Ontario. It has 30 locations across Ontario specializing in the sale of donuts, coffee and fast food. Its Barrie, Ontario territory has a Franchisee, \"Barrie Jimmy's,\" which is approaching the deadline date for its 10 year renewal for its franchise agreement with Jimmfs. If Barrie Jimmy's Franchise Agreement isn't renewed, the Franchisor, Jimmy's, could under the Franchise Agreement take control and possession of the location since the lease is with the Franchisor, Jimmy's and the agreement gives it the authority to take control in the event of non-renewal. The Franchisor, Jimmy's has been negotiating franchise renewals with its other locations. The Franchisee fee is 10% for royalties on gross sales, although some Jimmifs locations have been signed with renewals at a lower royalty rate. For example, a different franchisee, "Sudbury Jimmy's\" renewed its Franchisee Agreement for 15 years at 6% royalty fee to the Franchisor, Jimmy's. The signing fee for a renewal is usually $35,000 but Sudbury Jimmy's and other locations have signed for less at $20,000. Barrie Jimmy's is one of the few successful locations, which may explain why it was charged more for its renewal fees and royalties. The owner of the Barrie Jimmy's meets with the CEO of Jimmy's, Mark Matlow, who says he wants to renew the franchise agreement with Barrie Jimmy's on the same terms as its other locations at the standard rate of 10% royalties. Matlow and Jim Jorton's fails to disclose material facts to Barrie Jimmy's prior to Barrie Jimmy's signing ofthe Franchise Renewal Agreement, including a lawsuit from a creditor, Hedgehog Hedge Funds, where Jimmy's owes $5 million that the creditor seeks to collect on its debt. After Barrie Jimmy signs its franchise renewal agreement, it learns about Sudbury Jimmy's discounted franchise royalty rates and lower fees upon franchise agreement renewal as well as the lawsuit by the creditor. The CEO of Barrie Jimmy's, Jen Kwon, has hired you to conduct legal research. .Ien thinks that Jimmy's has acted dishonestly and wants you to prepare a paper analyzing her problem. Jen wants you to discuss her concerns by connecting your analysis to good faith in contracts and franchise agreements. She would like you to determine whether there are any remedies available to her in the current contract and Franchise law regime and if not, how would you suggest changing Ontario Franchise and Canadian contract law to account for the necessary changes? In addition to the law of good faith in contracts, Jen also wants you to look at the Ontario Arthur Wishart Act which governs franchises in Ontario to see if it helps Barrie Jimmy/s. Instructions A thesis and supporting arguments are necessary to show your analysis. Your analysis ought to examine expectations of contract law in the current regulatory regime, as defined by Franchise legislation, provincial or federal regulators, if applicable, and court decisions. Try to show a legal test, rules, or principles that a court is likely to use when assessing the client's problem. Legislation, common law, and scholarly discussions must go beyond a simple description or overview
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