Exemption Orders (Discretionary)

WENDY’S CANADIAN ADVERTISING PROGRAM INC.


IN THE MATTER OF THE SECURITIES ACT
R.S.B.C. 1996, c. 418

AND

IN THE MATTER OF WENDY’S CANADIAN ADVERTISING PROGRAM INC.


Exemption Order Under Sections 48 and 76


WHEREAS Wendy’s Canadian Advertising Program Inc. (“WCAP”) has applied to the Executive Director for an order under sections 48 and 76 of the Securities Act, R.S.B.C. 1996, c. 418, that intended trades by WCAP in Class A Shares of WCAP to franchisees of Wendy’s Restaurants of Canada Inc. (“Wendy’s Canada”) are exempt from the requirements of sections 34(1)(a) and 61 of the Act;

AND WHEREAS WCAP has represented to the Executive Director that:

1. WCAP is incorporated under the laws of Canada and is a private issuer under the Act;

2. the authorized capital of WCAP consists of an unlimited number of common shares, an unlimited number of Class A Special shares (the “Class A Shares”) and an unlimited number of Class B Special shares (the “Class B Shares”), of which 178 Class A Shares and 100 Class B Shares were issued and outstanding as of December 31, 1997;

3. there are currently 47 shareholders of WCAP;

4. Wendy’s Canada is incorporated under the laws of Ontario, is not a reporting issuer under the Act and is the master franchisee of the Wendy’s system of quick service restaurants in Canada with rights to sub-franchise;

5. Wendy’s Canada and each of its sub-franchisees (together, the “Franchisees”) are licensed to operate Wendy’s restaurants in Canada;

6. the Franchisees contribute a specified percentage of revenues from the restaurants they operate to a common fund for purposes of advertising nationally in Canada to benefit the Wendy’s system;

7. the principal purpose of WCAP is to administer advertising funds contributed by Franchisees for the national advertising program, and its revenues are expended to purchase advertising in various media;

8. Class A Shares of WCAP are distributed to Franchisees on the basis of one Class A Share per Wendy’s restaurant operated by each Franchisee at a subscription price of $1 per Class A Share;

9. from time to time, WCAP may repurchase Class A Shares from Franchisees and redistribute them to other Franchisees on the basis described in paragraph 8;

10. Franchisees are under no obligation to acquire Class A Shares, but ownership will permit Franchisees to participate in the distribution of the assets of WCAP in the event of dissolution or winding-up;

11. prior to the distribution of a Class A Share, WCAP will deliver to each prospective purchaser a copy of the constating documents and by-laws of WCAP, the most recent financial statements of WCAP, a copy of this order and a statement that certain restrictions are imposed on the disposition of the Class A Shares;

12. WCAP provides audited annual financial statements to its shareholders;

13. the articles and by-laws of WCAP provide that:
      (a) WCAP shall not distribute Class A Shares except to Franchisees;

      (b) no shares may be transferred without the express approval of the directors of WCAP;

      (c) no transfer will be approved unless it is to a Franchisee; and

      (d) invitations to the public to subscribe for shares are prohibited; and
14. once the number of shareholders of WCAP reaches 50, WCAP will not be able to rely upon the registration and prospectus exemptions contained in sections 46(j) and 75(a) of the Act to distribute Class A Shares to Franchisees resident in British Columbia (the “B.C. Franchisees”);

AND WHEREAS the Executive Director considers that to do so would not be prejudicial to the public interest;

IT IS ORDERED:

1. under sections 48 and 76 of the Act, that the intended trades by WCAP in Class A Shares to B.C. Franchisees are exempt from the requirements of sections 34(1)(a) and 61 of the Act; and

2. under section 76 of the Act, that any trade in Class A Shares acquired under this order, other than to a Franchisee, is deemed to be a distribution unless:
      (a) WCAP is a reporting issuer and has been a reporting issuer for the 12 months immediately preceding the trade;

      (b) if the seller is an insider of WCAP, other than a director or senior officer of WCAP, the seller has filed all records required to be filed under sections 87 and 90 of the Act;

      (c) if the seller is a director or senior officer of WCAP, the seller has filed all records required to be filed under sections 87 and 90 of the Act and WCAP has filed all records required to be filed under Part 12 of the Act and the Securities Rules, R.B.C. Reg. 194/97;

      (d) the trade is not a distribution from the holdings of a control person;

      (e) no unusual effort is made to prepare the market or create a demand for the security; and

      (f) no extraordinary commission or other consideration is paid in respect of the trade.

DATED at Vancouver, British Columbia, on June 23, 1998.





Margaret Sheehy
Director
©2025 British Columbia Securities Commission