September 4, 2018 3:49 pm
Updated: September 4, 2018 6:49 pm

Tim Hortons seizes 4 Alberta locations amid franchise dispute

WATCH ABOVE: A battle that has been brewing between between Tim Hortons and one of its franchisees has boiled over. Four Lethbridge locations once belonging to an Alberta businessman have been seized by the parent company.

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Four southern Alberta Tim Hortons locations have been taken back by the coffee chain’s parent company after a dispute with the locations’ franchisee.

David Hughes was the owner of the four locations in Lethbridge, Alta., but the locks on his stores were changed over the weekend.

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Restaurant Brands International Inc. (RBI), the parent company of Tim Hortons, confirmed it was behind the move.

“We can confirm that Mr. Hughes no longer owns any Tim Hortons restaurants,” spokesperson Jane Almedia said in an emailed statement.

“Those four Tim Hortons restaurants are open and under corporate management until a new franchisee is selected to own and operate those stores.”

Hughes was also part of an owners group called the Great White North Franchisee Association (GWNFA).

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Its website says the group was formed to protect store owners and address mismanagement of franchise operations by the parent company. The group claims to represent about half of Canada’s Tim Hortons franchisees.

RBI and the GWNFA have been embroiled in a public battle since the group formed more than a year ago.

“I believe RBI has specifically targeted me in order to hurt the Great White North Franchisee Association,” Hughes said in an emailed statement.

“Since our inception, the association has shone a light on many practices and policies that are detrimental to individual franchisees and the chain as a whole.”

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But RBI says its actions have nothing to do with Hughes’ involvement with the association.

“The Tim Hortons franchisee agreement clearly states it is not allowable for any restaurant owner to share confidential company information with the media; disparage the company or the Tim Hortons brand in the media or with community partners and vendors; or ultimately harm the Tim Hortons brand in any way,” Almedia said.

“Sometimes we agree and sometimes we don’t, but we have no tolerance for any owner that knowingly damages our brand.”

Hughes’ statement didn’t address RBI’s specific allegations and his representative did not reply to Global News’ inquiries related to those claims.

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A separate group, the Tim Hortons restaurant owner advisory board, is aware of the actions and supportive of the company’s actions.

Franchise lawyer Christopher Neufeld, who isn’t involved in this dispute, says it’s very rare for franchise disputes to get to this level.

“In most cases, there’s been a history of behaviour between the franchisor and franchisee where they haven’t been able to address the situation properly.”

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The details of compensation for Hughes’ location have not been made public. Hughes remains defiant and vows his criticism won’t be silenced.

“In relieving me of my stores, RBI believes they will put an end to the association, but it will continue to be the conscience of the corporation and brand.”

READ MORE: Ottawa probing Tim Hortons for potentially violating terms of 2014 takeover

— With files from The Canadian Press

© 2018 Global News, a division of Corus Entertainment Inc.

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