Canadian Manufacturing

Tim Hortons denies controversial franchisee licence renewal amid public battle

The coffee chain and its franchisees have been in disputes over a range of issues including cost-cutting measures, advertising, cash register outages and recently announced plans for renovations

April 10, 2018  by Tara Deschamps, The Canadian Press

The Great White North Franchisee Association, which represents Tim Hortons franchisees, says Mark Kuziora was denied a renewal for one of his two Toronto Tim Hortons outlets as an intimidation tactic. Kuziora was named as a plaintiff last year in a lawsuit against the coffee chain. PHOTO: Wladyslaw, via Wikimedia Commons

TORONTO—A group representing about half of Canada’s Tim Hortons franchisees is vowing “to do everything in our power” to assist a prominent member whose licence renewal was denied amid his ongoing tensions with the fast food giant.

In a letter sent to franchisees on Monday and obtained by the Canadian Press, the Great White North Franchisee Association (GWNFA) board said it is “appalled” that Mark Kuziora, who owns two Toronto Tim Hortons franchises, was allegedly told by Tim Hortons parent company Restaurants Brands International in early April that he would be denied a renewal for one of the restaurants at the end of August.

The board said Kuziora had been negotiating with RBI and TDL Group, a Tim Hortons subsidiary, since September and trusted the negotiations were being done “in good faith.” Last week it said he received an email from RBI and TDL “out of the blue,” saying they will be in touch with him in the coming weeks to discuss the transfer of the restaurant to a new owner.

GWNFA said it considers the move an intimidation tactic.

“The management at RBI has no idea how hard we are going to hit back. We will not stand by and let a good franchisee, who cares deeply about his fellow franchisees and the Brand, be railroaded this way,” said the board.

“This action is unfair, unethical and a manifestation of the lack of character of RBI management. You cannot trust them. Don’t doubt for one minute that you are next.”

Tim Hortons said in an email to the Canadian Press that Kuziora doesn’t have any renewal rights under the licence agreement for the restaurant.

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“We regularly onboard new Restaurant Owners and transition Restaurants as part of our normal course of business activity,” the statement said.

GWNFA President David Hughes called the fast food company’s actions “preposterous” and said Kuziora has been “an exemplary franchisee for years and has given his heart and soul to the chain.”

Kuziora was recently involved in a class-action lawsuit that alleged RBI used money from a national advertising fund improperly.

Kuziora accused RBI of funnelling nearly $700 million to be used for advertising, marketing and sales promotions to itself and TDL.

At the time, RBI said it “vehemently” disagreed with and denied all the allegations.

Its current tussle with Kuziora comes after the company faced fierce criticism and customer campaigns to boycott the restaurant in January after two Cobourg, Ont. franchises owned by Ron Joyce Jr. and Jeri Horton-Joyce, the children of the company’s billionaire co-founders, moved to offset Ontario’s recent minimum wage hike by cutting paid breaks and forcing workers to cover a bigger share of their benefits.

In late February, tensions flared once more when some franchisees experienced intermittent cash register outages that forced them to partially or fully shut down some stores. GWNFA demanded compensation for the outages, caused by a virus, and threatened legal action if it didn’t get a meeting with RBI to discuss “deficient IT practices.”

A month later, they were sparing again over a $700-million renovation plan to bring a more natural look and open-concept seating to Tim Hortons locations. GWNFA said the plans—which asked franchisees to kick in $450,000 each for renovations—were “ill-conceived.”

GWNFA’s letter said Kuziora was willing to have his restaurants undergo renovations and called him a “good operator who has put his life savings into his business.”

“He has pinned the hopes of his family and their future on his investment in Tim Hortons,” GWNFA’s letter said. “Marks needs us today.”