Menu
Blog Banner Image

The Franchise Memorandum

Ontario Appeals Court Upholds Decision Dismissing Franchisees’ Class Action Claims
Posted in International

In an important victory for franchisors, the Court of Appeal for Ontario has upheld a lower court’s decision dismissing Tim Hortons franchisees’ claims in a proposed class action. Fairview Donut, Inc. v. The TDL Group Corp., [2012] ONCA 867 (Dec. 7, 2012). As we reported in the April 2012 edition of The GPMemorandum, the Ontario Superior Court of Justice had dismissed a $2 billion action brought against Tim Hortons by a putative class of franchisees relating to Tim Horton's transition to a new donut production system and the pricing of its products.

The franchisees appealed the decision granting summary judgment on the breach of contract and statutory duty of good faith claims. The Court of Appeal for Ontario upheld the lower court’s decision, finding that none of the franchisees’ claims could succeed and that Tim Hortons’ decision to move to a new donut production system was a rational business decision for “valid economic and strategic reasons.” The appeals court also decided that the franchise agreements did not require that every new product that Tim Hortons rolled out to the system be profitable. These decisions signal to franchisors that Ontario courts will uphold the terms of a franchise agreement provided that the franchisor acts in good faith.

Email LinkedIn Twitter Facebook

The information contained in this post is provided to alert you to legal developments and should not be considered legal advice. It is not intended to and does not create an attorney-client relationship. Specific questions about how this information affects your particular situation should be addressed to one of the individuals listed. No representations or warranties are made with respect to this information, including, without limitation, as to its completeness, timeliness, or accuracy, and Lathrop GPM shall not be liable for any decision made in connection with the information. The choice of a lawyer is an important decision and should not be based solely on advertisements.

About this Publication

The Franchise Memorandum is a collection of postings on summaries of recent legal developments of interest to franchisors brought to you by Lathrop GPM LLP. 

To subscribe to monthly emails for The Franchise Memorandum, please click here

Topics

Archives

2022

2021

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

Blog Authors