Tim Hortons faces U.S. franchisee lawsuit alleging ‘fraudulent’ business scheme

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TORONTO — A group claiming to represent the majority of American Tim Hortons franchisees has filed a lawsuit against the fast-food giant’s U.S. division, its parent company, some of its affiliates and its former president, alleging they have engaged in an illegal and fraudulent business scheme.

The Great White North Franchisee Association USA Inc. alleges the company has used provisions in agreements to charge Tim Hortons franchisees as much as 50 per cent above what competitors pay for supplies like coffee, baking goods, meat and paper products.

The lawsuit filed in a Florida court alleges Tim Hortons affiliate TDL Group sells supplies and products to Tim Hortons, which then sells them to a distributor, which in turn sells them to franchisees.

The association says that chain means Tim Hortons franchisees are forced to purchase items for as much as $104 more for a case of applewood bacon, about $24 more for boxes of soft drinks and roughly $12 more for a case of plastic straws than Wendy’s franchisees pay.

The lawsuit complains that the marked up prices hurt franchisees and make their business economically prohibitive.

RBI and Tim Hortons did not immediately respond to The Canadian Press’s requests for comment.

Companies in this story: (TSX:QSR)

2 COMMENTS

  1. I heard Fountain Tire has a similar type of head-office centric ‘program ‘.
    Local store owners can’t really buy much locally and everything has to go through their head office in Edmonton at a higher cost.

  2. Kettle.. pot – black, go into any Tim Horton’s here in the Sault at least, not sure about any where else in Ontario or Canada.. but, buy two or more coffee & you’ll pay the tax on each individual cup. Then they’ll tap that tax button one more time and add 13% to the overall total.

    Tim Horton’s is a classic example of what ‘people’ & business has become around the world.. every one is out to gouge & grab at every nickle or dime they can get their hands on, by what ever means or loophole they can find. It’s sad to realize that we take very little pride in our work any-more & there seems to be just as little concern for the consumer perspective.

    Do I feel sorry or concerned for a multi-billion dollar corporation that’s ‘eating it’s own’.. not so much. I’m more concerned about the ‘real-story’ here, that millions of people across the country are stepping up to that cash-register.. & paying 26% more for 26% less of what’s supposed to be in their cup.. just sayin’.

    Strange daze indeed..
    .

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