Tim Hortons franchisee sues parent company for $4M over licence renewal
Lease on one of plaintiff's 2 outlets expires at end of August
A Tim Hortons franchisee filed a $4-million lawsuit against the coffee and doughnut chain's parent company after he says it refused to renew a licence for one of his stores in bad faith.
"The actions of the defendant were callous, wanton and in total disregard of the rights of the plaintiff," reads a lawsuit Mark Kuziora filed April 12 in the Ontario Superior Court against TDL Group Corp., a subsidiary of parent company Restaurant Brands International.
Kuziora owns two Tim Hortons locations in Toronto. The lease for the one at 200 Bay St. expires Aug. 31.
Last spring, RBI started discussing future renovations of the Bay Street store with Kuziora, according to the lawsuit, and confirmed its established practice of "granting 100 per cent of term renewals for franchisees prepared to undertake renovations would be followed."
Kuziora committed to the renovations with the understanding the company would renew his lease, according to the suit.
On March 27, Greg Hiltz, the area franchise lead for central Canada, informed Kuziora this would not happen, despite previously confirming the company had no plans to deviate from its standard practice.
The lawsuit claims RBI decided to reject the renewal in bad faith based on Kuziora's tense relationship with management.
Kuziora belongs to the Great White North Franchisee Association, a group that claims to represent about half of Canada's Tim Hortons franchisees and formed to voice the franchisees' concerns.
He is also the lead plaintiff in a class-action lawsuit filed by the GWNFA alleging RBI improperly used money from a national advertising fund, funnelling nearly $700 million earmarked for advertising, marketing and sales promotions to itself and TDL. RBI previously denied these allegations, which have not been proven in court.
RBI and the GWNFA have been embroiled in a public battle since the group formed more than a year ago, with the parent company largely choosing to ignore the association aside from specific remarks and filing legal action against them.
Tim Hortons president Alex Macedo recently admitted the company could have handled things better and said he's spoken to GWNFA members on a cross-country tour of visits with franchisees aimed at repairing the relationship.
Neither RBI nor Tim Hortons immediately responded to a request for comment on Kuziora's legal action, and none of the allegations have been proven in court.