Tim Hortons franchisee group cites ‘intimidation’ by parent company RBI

Tim Hortons
Tim Hortons

A group representing about half of Canada’s Tim Hortons franchisees has vowed to do everything in its power to assist an outspoken member whose restaurant licence renewal was denied amid ongoing tensions with the fast food giant.

In a letter sent to franchisees on Monday, the Great White North Franchisee Association 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.

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The move follows months of spats between GWNFA and Tim Hortons over everything from cost-cutting measures to a class-action lawsuit over the company’s alleged improper use of a $700 million national advertising fund. GWNFA said it considers the latest move against Kuziora, who was the lead plaintiff in the lawsuit, as 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,” the board said.

“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.

“We regularly onboard new restaurant owners and transition restaurants as part of our normal course of business activity,” the statement said.

Tony Wilson, a Vancouver-based lawyer who specializes in franchising, said it’s not unheard of for franchisors to deny licence renewals. But he said when spats like this become public it “doesn’t do great things for the brand.”

He hasn’t seen a copy of Kuziora’s agreement with the company and Tim Hortons hasn’t said why the renewal was denied, but Wilson said if there was a breach of their agreement, Tims could have the right to terminate or not renew the contract.

However, if there are no reasonable grounds for not renewing Kuziora’s license, and the company is doing this because of Kuziora’s involvement in GWNFA, Wilson said the company could be in the wrong.

“For Tims not to renew, they better have a good reason,” said Wilson. “I think it is a dangerous strategy for Canada’s feel-good franchisor.”

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.”

The latest spat between restaurant operators and the company comes after Tim Hortons faced fierce criticism and customer campaigns to boycott the restaurant in January after two Cobourg, Ont. franchises 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 sparring 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.”

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