Monday, June 19, 2017

Tim’s franchisees sue their boss

A group of Tim Hortons franchisees has filed a $500-million class-action lawsuit against the parent company, accusing it of mismanagement and making it harder for them to stay in business.

The Great White North Franchisee Association said that ever since Restaurant Brands bought Tim Horton’s in 2014 and merged it with Burger King, their costs have increased, but the new owners haven't allowed them to raise prices to recoup those costs.

They went public with their complaints earlier this year, but recently met with management behind the scenes to try to address their concerns.
After those meetings ended last week, they launched the class-action lawsuit on Monday.

"Since its acquisition," the statement of claim reads, Restaurant Brands “has used various strategies to extract more money out of the Tim Hortons franchise system at the expense of franchisees."

There have also been complaints about lower quality standards and even riskier equipment, such as coffee-brewing glass containers that are more prone to break.

Restaurant Brands fired almost all the executive staff and many of the next-tier managers and brought in recent business school graduates who are required to hit financial performance goals.

Restaurant Brands is controlled by 3G, a hard-nosed investment company from Brazil that also bought Heinz and merged it with Kraft Foods. Warren Buffet owns slightly more shares in these ventures than 3G, but leaves management to 3G.