Group of Tim Hortons franchisees in Quebec sue brand owner for $18.9 million
![Tim Hortons A fast food outlet is seen on St. Jacque Street in the borough of Notre-Dame-de-Grace, Friday, November 8, 2019 in Montreal. THE CANADIAN PRESS/Ryan Remiorz](/content/dam/ctvnews/en/images/2024/3/31/tim-hortons-1-6828148-1711883680810.jpg)
Several Quebec Tim Hortons franchisees are taking the brand's owner to court, blaming what they describe as unreasonable constraints in the company's licensing agreements for lower-than-expected profits.
In a lawsuit filed in Quebec Superior Court on Thursday, 16 companies with Tim Hortons franchise licences allege the TDL Group Corp.'s contracts "place it in a position of absolute dominance" over their combined 44 restaurants.
"Through these Tim Hortons licence agreements ... TDL controls every essential lever involved in the running of a restaurant," from deals with suppliers to equipment," the plaintiffs allege in their application.
TDL also sets prices for both menu items and the ingredients restaurants need to make them, the lawsuit contends.
Yet TDL's policy of fixing prices didn't adapt to the market, the franchisees assert. They argue the franchisor's rules leave them "no room for manoeuvre" and impose costs they are unable to match in sales. A resulting blow to their profits has reduced the value of their restaurants and made it difficult for them to bear the cost of renovations and other investments that TDL expects, they say.
Before 2019, the franchisees' profitability mostly aligned with the forecast TDL provided them, the lawsuit states. But profits began to fall after that. And between 2021 and 2023, the 16 franchisee companies say they lost out on a combined $18.9 million.
Meanwhile appeals for reform, such as flexibility to set prices for some products within an agreed upon range, were unsuccessful, the statement of claim says.
The lawsuit argues TDL has therefore violated its contractual obligation to help and partner with the franchisees.
"As a result of TDL's breaches, the plaintiffs are unable to generate the adequate profitability to which they are entitled to expect," court documents read. "TDL has failed to help the plaintiffs and to act in a reasonable and diligent manner to work in concert with the franchisee to attain their common objectives."
The franchisees are seeking compensation from TDL to cover the 2021-2023 losses.
Tim Hortons has rejected the claims in the lawsuit, which have not been proven in court.
"Tim Hortons franchisees operate one of the most profitable and loved restaurant concepts in Canada and in Quebec," the company said in an emailed statement. "Just in the last three years, we have seen 24 Tim Hortons franchisees buy 77 restaurants in Quebec – because it is well known that franchisees have the opportunity to earn substantial profits when they operate the restaurants well and according to our brand standards."
Lawyers for the plaintiffs did not respond to a request for comment on Saturday.
This report by The Canadian Press was first published March 31, 2024.
CTVNews.ca Top Stories
![](https://www.ctvnews.ca/polopoly_fs/1.6972157.1721587842!/httpImage/image.jpg_gen/derivatives/landscape_800/image.jpg)
Joe Biden drops out of 2024 race, endorses Kamala Harris to be Democratic nominee
U.S. President Joe Biden dropped out of the 2024 race for the White House on Sunday, ending his bid for re-election after doubts were raised about his fitness for office. Soon after, he endorsed Vice-President Kamala Harris to take his place in the November election.
Justin Trudeau reacts to Joe Biden announcing he won't run for re-election
Prime Minister Justin Trudeau responded to the news that U.S. President Joe Biden won’t run for re-election Sunday, calling Biden a 'true friend.'
Joe Biden wants to pass the baton to Kamala Harris. Here's how that might work
With U.S. President Joe Biden ending his re-election bid and endorsing Vice-President Kamala Harris, Democrats now must navigate a shift that is unprecedented this late in an election year.
The pilot who died in crash after releasing skydivers near Niagara Falls has been identified
NEW YORK (AP) — Officials on Sunday released the name of a pilot who died in a skydiving flight after her passengers jumped from the aircraft near the Niagara Falls.
Woman found dead in the water near Sunset Beach: Vancouver police
Investigators were at Vancouver’s Sunset Beach after a woman’s body was found in the water Sunday morning, according to authorities.
Ottawa man waiting nearly a year for car to be fixed at Acura dealership
An Ottawa man says he’s been waiting nearly a year for his car to be repaired after it was damaged during a storm in August.
Canadian musicians struggle to get visas to perform in the U.S., some cancel shows
Backlogs and processing delays of temporary U.S. visas required by entertainers, athletes and artists has forced some Canadian bands to cancel U.S. tour dates because paperwork wasn't processed in time.
Joy in Newfoundland after 'Lucky 7' fishers survive harrowing days lost at sea
There was a powerful word being repeated in the joyful Newfoundland community of New-Wes-Valley on Sunday: 'Miracle.'
A Florida woman was killed 24 years ago. DNA evidence just helped police make an arrest in the cold case
A Florida woman’s brutal killing nearly 25 years ago may finally be solved after authorities arrested the suspect this week, according to the Sanford Police Department.