Remember, not long ago, when we related the frustration and anger that Canadian Tim Horton’s franchisees are experiencing over big changes at the head office? And that they were forming an association and had retained legal counsel to press their cause? Now, they’ve launched a class action suit…
The newly-formed Great White North Franchisee Association (GWNFA) was formed by angry franchise owners after the Canadian head office froze them out of the corporate annual meeting last month. GWNFA President David Hughes summed up the situation as his members see it, saying, “We are now part of an equation focused on profit extraction, and that profit goes to shareholders.”
The GWNFA has now launched a (C)$500 million class action suit claiming that the had office is mismanaging the brand and making it harder for the franchisees to stay in business.
Tim’s, you’ll recall, was bought out in 2014 by the holding company that already owned Burger King, Restaurant Brands International (RBI). RBI is, in turn, owned by 3G holdings, which apparently has some pretty severe ideas about doing business. ‘The 3G Way’ is one of lean management, cutting costs to the bone and extracting maximum profits from the front lines. It also, apparently, means instituting one-way communications, from the top down, and ignoring the concerns and issues that are important to the franchise owners.
A central issue in the suit is the alleged mismanagement of a (C)$700 million fund meant to be used for collective marketing of the brand. Plaintiffs in the suit allege that the money is not being spent on promotion, as intended and that some of the fu8nds have been diverted to other RBI accounts.
Tim’s Canada President Sami Siddiqui sent a letter to all Tim’s Canadian franchisees yesterday defending the head office and its management practices:
“We vehemently disagree with and deny all the allegations that have been made about our business and the brand. It is very unfortunate that certain owners have chosen to make these public accusations given that we have offered to let any owner come in and review the numbers with us, line by line, as we have done in the past. As we have discussed many times before, these types of public accusations will only hurt the brand that all of you have worked so hard to build.”
We’ll be following this one closely. We wonder how Burger King franchisees feel about RBI’s management policies…
~ Maggie J.