TORONTO — Restaurant Brands International (RBI) is close to reaching settlements in two class-action lawsuits filed by the Great White North Franchisee Association (GWNFA) — an organization representing approximately half of Canadian Tim Hortons franchisees, according to The Canadian Press.
The two parties reportedly submitted a term sheet, outlining key points for a future settlement in the two cases, to the Ontario Superior Court of Justice on February 6 following weeks of negotiations.
The first lawsuit, filed in June 2017, alleged RBI improperly used funds from a national advertising fund. The second, filed in October 2017, alleged the fast-food operator tried to intimidate its restaurant owners and force the franchisees who formed the GWNFA out of their restaurants, subverting the franchisees’ right to associate.
The submitted term sheet outlines key terms of a future settlement, which reportedly include agreement that Tim Hortons’ elected advisory board remains the only organization that represents the franchisees’ interest; a statement that the brand has not interfered with any franchisees associated with the GWNFA and will not do so in the future; shortening of advisory-board member terms to three years; and a shift to electronic voting. Additionally, four members of the advisory board will review details of advertising-fund spending at least four times a year. The terms also indicate that Tim Hortons will pay $5 million per year for two years to boost local and regional marketing budgets.
The two parties are expected to continue negotiating settlement details and aim to bring an agreement to the judge on March 21, which will then be distributed to all Canadian Tim Hortons franchisees, who will be given four weeks to accept or reject the terms.
Another hearing is scheduled for April 26, when any dissenting franchisees will have an opportunity to have their voices heard and a final ruling will be made on the settlement.
