In November 2014, Ontario’s government introduced Bill 45, the Healthy Menu Choices Act, requiring all restaurant chains in the province to display the number of calories for each standard food or drink item on their menus. As law firm Osler Hoskin & Harcourt points out, this has implications for both franchisees and franchisors.
Quick-service restaurants (QSRs), convenience stores and other businesses with more than 20 locations operating under the same name that sell prepared meals for immediate consumption could be affected by the legislation. If it is passed, calorie information will be required for each variety, flavour and size of standard food and drink menu items, to be displayed on one or more signs, on each menu where the item is listed and, if on display, the food’s label or tag.
Franchisees presumably fall under the bill’s definition of “a person who owns or operates a regulated food-service premise,” according to Christine Jackson and Nicole J. Kutlesa, associates at Osler in commercial law. The definition has posed some uncertainty, but Jackson and Kutlesa speculate if the legislation is passed, both franchisors and their franchisees could be found liable for any failure to display the required information. This liability could especially pose difficulty for franchisors who do not have or want complete control over their chain.
The penalty for non-compliance with the legislation has been set for $5,000 per day for the first offence and $10,000 per day for the second offence and beyond. Liability is also extended to all directors and officers of the non-compliant corporation if they fail to take measures to comply with the act. Individual fines are set for $500 per day for first-time offenders and $1,000 per day for repeat offenders.