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$2 billion lawsuit against Tim Hortons dropped

March 1, 2012

A $2 billion class action lawsuit brought forth by Tim Hortons franchisees against the parent company has been rejected by a judge.

According to the CBC, the group of franchise owners accused the chain of gouging them under its new doughnut-making process.

The judge's summary in favor of the corporate office dismissed the franchisees' argument that the chain was disproportionately profiting from the new process.

A few years ago, Tim Hortons stopped making baked goods from scratch in its locations every day, and instead shipped partially-baked items that had been flash frozen. Stores then did the final bake on location every morning.

This new method has been profitable for the parent company. However, the plaintiffs argued that it added new costs to them at the same time.

The suit also claims corporate was requiring franchisees to sell new lunch items at break-even or loss prices, which is a breach of their agreements.

The judge dismissed the entire case, and said Tim Hortons is within its rights to implement new procedures and technologies into its business model.

Animal activists pour on pressure

The Humane Society of America plans to propose a shareholder vote in May to Tim Hortons, asking the company to stop confining hens in cages and sows in gestation crates.

According to Reuters, a Tim Hortons spokesperson said it is actively working with its suppliers to make long-term improvements in animal welfare, and will provide an update and address the shareholder proposal within the next month.

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