Feds examine grievances by franchisees about Tims parent firm

The federal government is looking into concerns raised by a dissident group of Tim Hortons franchisees about the potential violation of terms Ottawa placed on a deal that saw Canada’s most iconic restaurant chain taken over by a Brazilian firm.

A spokesman for Innovation Minister Navdeep Bains said Thursday the government will investigate allegations that Tims owner Restaurant Brands International has failed to live up to promises made to the federal government under the Investment Canada Act in 2014.

“We’re aware of the concerns raised by the franchisees and looking into them,” spokesman Karl Sasseville said in a statement. “We are monitoring compliance with the undertakings, as we do with all investments.”

The government’s response is in regards to a list of grievances outlined in a letter sent to Bains earlier this month by lawyers representing the Great White North Franchise Association, which represents about half of Canadian Tims franchisees.

In the letter, the attorneys cite commitments that Brazilian firm 3G Capital, which owns RBI, made to the federal government when it acquired Tim Hortons in 2014, including maintaining franchisee relationships, the rent and royalty structure for five years and existing employment levels at franchises across Canada. They say the company has failed to live up to those commitments, and that “appropriate remedies” should be made. “The franchisees are increasingly concerned with RBI’s selfserving attempts to significantly increase its margins at the expense of the franchisees.”

The franchisees say the company has effectively changed the rent and royalty structure by saddling them with rising costs and requiring them to renovate stores at their own costs.

In response to word that the federal government is looking into the franchisees’ claims, a spokesman for Tim Hortons said the company hadn’t been notified of any official inquiries.

“What I can tell you, is that every year we have reported to the government on meeting our undertakings, without complaint,” said company spokesman Patrick McGrade. “We have always been and remain committed to doing good business in Canada.”