Tim Hor­tons fran­chisee seeks class-ac­tion law­suit against par­ent com­pany

The Telegram (St. John’s) - - BUSINESS -

TORONTO — A Tim Hor­tons fran­chisee is seek­ing a clas­s­ac­tion law­suit against par­ent com­pany Restau­rant Brands In­ter­na­tional (RBI), al­leg­ing it im­prop­erly used money from a na­tional ad­ver­tis­ing fund. The claim al­leges that since RBI ac­quired Tim Hor­tons in 2014, its sub­sidiary TDL Group Corp. started to charge ad­min­is­tra­tive and op­er­a­tional ex­penses, such as the costs of fran­chisee train­ing, to the fund. It also al­leges TDL failed to pro­vide state­ments of the fund’s op­er­a­tions, which is re­quired by fran­chise agree­ments. “RBI has fun­nelled the money to it­self, TDL and the in­di­vid­ual de­fen­dants at the wrong­ful ex­pense of the fran­chisees,” read the claim filed on be­half of fran­chisee Mark Kuziora in On­tario Su­pe­rior Court on Mon­day.

The al­le­ga­tions have not been proven in court. The suit is seek­ing $500 mil­lion in dam­ages.

Each fran­chisee con­trib­utes 3.5 per cent of their gross sales to the fund to be used for ad­ver­tis­ing, mar­ket­ing and sales pro­mo­tion, ac­cord­ing to the claim. Since Dec. 14, 2014, the fund has col­lected nearly $700 mil­lion, it says.

TDL and sev­eral in­di­vid­u­als, in­clud­ing RBI CEO Daniel Schwartz, are listed as de­fen­dants in the pro­posed class ac­tion.

“We ve­he­mently dis­agree with and deny all the al­le­ga­tions,” RBI said in a state­ment, adding it’s “very dis­ap­point­ing” that a few restau­rant own­ers opted to take ac­tion against the com­pany.

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