Tim Hortons franchisee seeks class-action lawsuit against parent company
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.