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Tim Hortons franchisee seeks $500M in class action against RBI

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June 23, 2017

A Tim Hortons franchisee is suing the chain's parent company, Restaurant Brands International, for $500 million in damages, claiming that RBI used national advertising funds improperly.

A report in the Toronto Sun this week said that Canadian franchisee Mark Kuziora is bringing the suit and seeks to make it a class action. 

RBI — which also is the parent for Burger King — acquired the iconic Canadian-born Tim Hortons brand three years ago. That's when the franchisee, Mark Kuziora, told an Ontario Superior Court that an RBI subsidiary, TDL Group Corp., started charging Tim Hortons franchisees fees for things such as training, fees that Kuziora alleges were then funneled into the RBI ad fund, although RBI never issued required statements on that fund's operations. 

"RBI has funneled the money to itself, TDL, and the individual defendants at the wrongful expense of the franchisees," Kuziora's claim read.

TDL and a number of RBI leaders, including RBI CEO Daniel Schwartz, have been named as defendants in the proposed class action. The Toronto Sun said that the Great White North Franchisee Association, in which Kuziora is a member, was recently formed to raise franchisees' concerns related to the matter.

"The claim was filed because RBI failed to adequately respond to legitimate questions about its use of advertising funds collected from Tim Hortons franchisees," according to a group statement. 

Schwartz previously has said that he wishes the group had privately relayed their concerns when they met with him, the report said. 

"We vehemently disagree with and deny all the allegations," an RBI statement to the newspaper said.The brand's franchisees each give 3.5 percent of gross sales to the fund, which had collected nearly $700 million three years ago, the article said. 

In unrelated news about RBI brands, another of its chains, Burger King, this week committed to ending the use of chicken raised with antibiotics important to human medicine by the end of 2018, according to the National Resources Defense Council. NRDC states that as of today, 11 of the 15 leading fast food chains have now committed to some level of responsible antibiotics use in their chicken supply.

RDC estimates that nearly half of the nation's chicken industry has committed to similar action or already has such an action in place, according to published statements and data from the WattPoultryUSA 2017 Survey.