Quebec court orders Dunkin’ Donuts to pay $16.4 million to failed franchise owners

Political map of Canada
Political map of Canada

ECM sent me this story about the most immoral and socialist province in Canada.


Former Dunkin’ Donuts franchisees have been awarded a total of $16.4-million in damages from the company for losses suffered because of the “Tim Hortons phenomenon,” in which the donut shop saw almost all of its Quebec stores close in less than a decade as it lost market share, according to a superior court decision released Thursday.

The Quebec Superior Court ruled that Dunkin Donuts Canada Ltd. failed to protect and enhance its brand at the cost of the 21 franchisees and misled owners to get them to buy into a new strategy that ultimately failed.

“In this case, you have a very large franchisor with a successful chain and it’s facing a competitive threat by another large chain, i.e. Tim Hortons,” said Toronto-based franchise lawyer David Sterns of Sotos LLP. “And the judge’s view is that the franchisor couldn’t just cede the territory to the competitor, that it was incumbent on the franchisor to hold the ground for the system.”

There are currently 11 Dunkin’ Donuts stores left in Quebec, from a high of more than 200 in 1998.

In 2003 the franchisees launched the suit against Dunkin’ Brands — formerly Allied Domecq Retailing International Canada Ltd. — claiming they were induced under false pretenses to join a remodelling program that would boost sales by 15% in the first year and several subsequent years, which never happened.

The company also failed to live up to a promise to invest $40-million, half of which would come from franchise fees.

The lesson here for business owners and job creators is clear: never, ever start a business or expand a business in Quebec. They’re not just secular and anti-family, they’re socialist and anti-business.

Here’s an interesting post about Quebec’s fiscal situation:

Quebec’s austerity measures which include the raising of tuition fees for its post-secondary students have been headline news in Canada for the past month. In light of that, I thought that it was time to do a brief posting on Quebec’s financial situation.

Let’s start by looking at Quebec’s debt. Quebec is Canada’s second-most indebted province after Ontario and has the misfortune of having a bond credit rating that is in the lower middle of the pack, well below Alberta, Saskatchewan and British Columbia, Manitoba and below New Brunswick and Ontario at A+ (Standard and Poor’s), the same rating as Nova Scotia. This poor rating makes it more expensive for Quebec to service its debt. Quebec’s total debt in fiscal 2011 – 2012 is estimated to be $170.9 billion; this compares to Ontario’s estimated debt of $237.6 billion. Quebec’s debt nearly twice the size of all other provinces combined (excluding Ontario).

Quebec’s debt-to-GDP is estimated to be 51.2 percent in 2011 – 2012, the highest in Canada by a very wide margin with Ontario coming in second place at 37.2 percent and Nova Scotia coming in third place at 35.2 percent.

[…]If the Harper government follows through with its plans to wean Canada’s have-not provinces from the federal teat, Quebec may find it impossible to meet its fiscal goals. As well, when interest rates return to normal levels, Quebec’s expenditures on debt interest payments will become an ever-increasing portion of its overall spending. Since Quebec is already Canada’s most highly taxed regime, if the province hopes to meet its targets, it has only one choice – cut spending now.

It’s a worthless, backwards province that exists only by stealing money from hard-working provinces like Alberta and Saskatchewan. I hope Harper cuts them off – it’s not like they vote for him anyway. Let them eat grass and leaves for a few years.

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