A Tim Hortons franchisee group that operates almost half the chain’s locations in the United States filed a lawsuit Tuesday alleging their parent company engaged in price gouging and equity theft.
The Great White North Franchisee Association-U.S., the members of which run more than 300 Tim Hortons stores in the United States, says its members are being overcharged for a slew of items such as bacon and vinyl gloves, which they are required to buy from the company’s designated suppliers.
Restaurant Brands International “established a very aggressive and improper investment strategy in the Tim Hortons franchisee system, which resulted in the economic squeezing of Tim Hortons franchisees by RBI,” reads the suit filed in the Eleventh Judicial Circuit of Florida court on behalf of the American chapter of the Great White North Franchisee Association.
The lawsuit also contends that franchisees are facing “equity theft” because those looking to sell their franchises are forced to first offer their restaurants to Tim Hortons for the price of their depreciated furniture, fixtures and equipment.
None of the allegations have been tested in court and RBI disputes the allegations.
The U.S. GWNFA group claims RBI and Tim Hortons USA strip them of income and profit through increased and improper franchisee fees.
RBI raised the prices of necessary products and services — such as food supplies, paper cups, containers and cleaning supplies — that franchisees must purchase from approved vendors, according to the suit. These prices are “significantly above” open market prices, the suit alleges.
Tim Hortons franchisees pay $104.08 more per case of Applewood bacon than Wendy’s franchisees do, according to the court documents, and $23.85 more for boxes of diet and regular Coke.
