Tensions between franchise owners and parent companies are not uncommon in business. Such tensions are behind serious franchise law concerns being raised by Tim Hortons franchisees in Ontario and throughout Canada. According to the Great White North Franchisee Association, a franchisee has been denied renewal of his agreement for one of his two Toronto restaurants.
The Great White North Franchisee Association has been critical of many decisions made by the new parent company, Restaurant Brands International. The franchisee in question sits on the board of the association. He was also named as a plaintiff in a 2017 class-action lawsuit against the parent company’s use of franchisee contributions to a national advertising fund.
The association reportedly formed in 2017 as a reaction to concerns about how the brand was being managed after Restaurant Brands International took the reins. Franchisees have raised concerns about many issues, including cost-cutting measures and advertising expenses. The most recent spat is the result of plans to renovate Tim Hortons stores, which franchisees claim will cost restaurant owners $450,000 for each restaurant.
The Great White North Franchisee Association has attempted several legal maneuvers to address what they see as mismanagement issues from the parent company. The federal government says it will examine allegations that Restaurant Brands International did not live up to promises it made when the government granted permission for it to purchase the Canadian franchise under the Investment Canada Act in 2014. Amid these franchise law questions, the parent company appears to be striking back with this franchise renewal denial. Franchisees with questions on how to legally approach franchise law concerns should speak with an Ontario lawyer.
Source: cp24.com, “Ottawa probing Tim Hortons franchisee claims that RBI failing to honour terms“, April 13, 2018