The coffee chain Tim Hortons is often advertised as a symbol of Canadian culture but has faced backlash from franchisees since its sale to Restaurant Brands International Inc. RBI, an American company with a Brazil-based majority owner, took over Tim Hortons in 2014. Franchisees claim that RBI implemented dramatic changes which negatively affected their operations, and many are pointing to franchise law and class-action suits to settle these grievances.
ccording to Tim Hortons’ franchise owners, RBI’s policies and changes focus on adding value to their investors rather than to franchisees. The business financial since the acquisition seem to support this observation; RBI’s shares have more than doubled in value since its 2014 inception. Burger King has also seen an increase in market share since being acquired by 3G Capital, RBI’s majority shareholder.
Some franchisees argue that this apparent success is at the expense of their well-being. Franchise law has become a major part of the conversation as is often the case with such large acquisitions. Tim Hortons franchisees on both sides of the border are taking issue with changes in corporate policy, and class action lawsuits have been filed in relation to these issues.
Business acquisitions of any size have a wide range of legal complexities. Franchises involve multiple levels of ownership and agreement. When an acquisition takes place, both the franchisee and the new owner of a franchise group should be aware of their rights and responsibilities under franchise law. A lawyer who specializes in these issues can help franchisees navigate any changes or questions in these matters.
