Reference no: EM133322426

Case Study: ABC Ontario Inc. is a former franchisee of Mr. Submarine Limited ("Mr. Sub") and a class representative of 424 Mr. Sub franchisees. At the time when ABC was a Mr. Sub franchisee, Mr. Sub and Maple Leaf's relationship was governed by an agreement in which Maple Leaf was an exclusive supplier of ready-to-eat ("RTE") meats for 14 core Mr. Sub menu item. There was no direct contract between Mr. Sub franchisees and Maple Leaf, and orders were placed through a distributor; however, there was a dedicated phone hotline for franchisees to contact Maple Leaf should any issues arise. Though Mr. Sub franchisees were contractually bound to purchase from suppliers approved by Mr. Sub, they could rely on other suppliers if Mr. Sub approved of their request to do so.

On November 16, 2022, the Canadian Food Inspection Agency ("CFIA") informed Maple Leaf of a finding of listeria (bacteria) in one of its products and in the subsequent weeks, Maple Leaf voluntarily recalled its meat products, including the RTE meat products used by Mr. Sub franchisees. Mr. Sub was publicly associated with Maple Leaf during the recall and a settlement was reached by the two parties to cover the inconvenience caused by the voluntary recall. The Mr. Sub franchisees, however, felt the direct consequence of Maple Leaf's recall, experiencing a significant decrease in sales and profits following the listeria outbreak. ABC Ontario Inc. has filed a lawsuit, accusing Maple Leaf and requesting damages.

Question 1: What kind of tort claims are possible in the given scenario and why?
Question 2: Can ABC Ontario Inc. be treated as an agency of Mr. Sub? Explain with reasons