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Q&A with Frank Zaid: Legal issues and food-service franchises

Nutrition labelling

The Ontario Food Premises Regulation specifies the minimum standards for food temperatures, handling, sanitation, dishwashing, and personal hygiene practices.
The Ontario Food Premises Regulation specifies the minimum standards for food temperatures, handling, sanitation, dishwashing, and personal hygiene practices.

On May 26, 2015, the government of Ontario passed Bill 45, the Making Healthier Choices Act. As of January 1, 2017, restaurant chains, convenience store systems, and other food-service providers that have 20 or more locations operating under the same (or substantially the same) name within the province need to display the number of calories in each variety, flavour, and size of menu items—including food and drinks—offered with standardized portions and content. The prescribed information must appear on one or more signs, on each menu where the standard items are listed and, if the actual item is displayed, on that food’s label or tag as well.

Originally, this legislation designated franchisors as operators of restaurants and responsible for individual franchisees’ compliance, but the wording was later revised after consultation with the franchising sector. The final act defines the owner or operator as a “person who has responsibility for and control over the activities carried on at the regulated food-service premise,” which “may include a franchisor, a licensor, a person who owns or operates a regulated food-service premise through a subsidiary and a manager of a regulated food-service premise,” but “does not include an employee who works at a regulated food-service premise but is not a manager.”

Ontario’s penalties for non-compliance are $5000 for each day of non-compliance for a corporation’s first offence and up to $10,000 per day for a subsequent offence. Liability is extended to directors and officers of the non-compliant corporation who fail to take all reasonable care to ensure compliance. Penalties for individuals are $500 for each day of non-compliance for a first offence and up to $1000 per day for a subsequent offence.

The legislation clearly allows franchisors to be held responsible for compliance by their franchisees if the franchisor is found to have responsibility for and control over the activities carried on by a franchisee of a food-service location. The act could result in an increased risk of litigation, including class actions. While it does not create a private right of action, it also does not expressly negate consumer claims grounded in misrepresentation, negligence, or other torts.

Other provinces are also considering rules for fast-food chains to post caloric information and some may adapt Ontario’s legislation, while others may imitate British Columbia’s Informed Dining program, which also mandates caloric information disclosure.

There are a number of provincial food policies, regulations, and guidelines in British Columbia that support healthy eating. The BC Trans Fat regulation and Informed Dining program are examples of provincial food policies that support healthy eating at food service establishments.

The Informed Dining program is a voluntary action plan for restaurants developed by the province of British Columbia. Participating restaurants provide their guests with nutritional information, that is easy to access and understand, for all standard menu items.

The provincial government restricts trans fat in all food-service establishments. The Trans Fat Help website provides detailed information about the three requirements under the BC Trans Fat regulation, and includes guidance on how to replace partially hydrogenated oils and shortenings with healthier alternatives. The Consumer Guide instructs consumers on what they can do to reduce intake of trans fat at home, at the grocery store, and at restaurants.

In Manitoba, the Public Health Act is the enabling legislation for food and food handling establishments within that province. Further, the Food and Food Handling Establishments Regulation contains extensive requirements for the operation of food-service establishments.

Provincial legislation is not the whole story, either. Federal packaging and labelling legislation requires specific nutrition labelling, including calorie content declarations. Most foods sold in restaurants, however, including takeout and delivery, are exempt from these requirements which are only applicable to prepackaged foods. Food policy at the federal level also supports healthy eating. Examples of federal food policy include food labelling and advertising regulations, Eating Well with Canada’s Food Guide, and the Food and Drug Regulations.

Health Canada develops nutrition labelling regulations, but it is the Canadian Food Inspection Agency (CFIA) that is responsible for the enforcement of the regulations. New regulations were published on December 14, 2016 with a five-year transition period established for industry to meet the new requirements. Companies may apply either the former regulations or the new regulations during this time.

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