Tag Archives: Economics

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.

Excerpt:

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.

Obamanomics: a closer look at the economic achievements of Barack Obama

From Investors Business Daily.

Full text:

May’s weak jobs report further confirms the president’s policies are failing to help the economy. This is, indeed, the worst recovery since the Depression.

Negative superlatives associated with this presidency keep piling up. The toll so far:

  • The share of Americans who’ve been out of work a long time — now at 42% of the unemployed — is the highest since the Great Depression (source: Labor Department).
  • The proportion of the civilian working-age population actually working, at 58%, is the smallest since the Carter era (Labor Department).
  • Growth in nonfarm payroll jobs since the recovery began in June 2009 is the slowest of any comparable recovery since World War II (Hoover Institution).
  • The rate of new business startups — the engine of job growth — has plunged to an all-time low of 7.87% of all businesses (Census Bureau).
  • 3 in 10 young adults can’t find jobs and live with their parents, highest since the 1950s (Pew Research).
  • 54% of bachelor’s degree-holders under the age of 25 are jobless or underemployed, the highest share in decades (Northeastern University).
  • Black teen unemployment, now at 37%, is near Depression-era highs (Labor Department).
  • Almost 1 in 6 Americans are now poor — the highest ratio in 30 years — and the total number of poor, at 49.1 million, is the largest on record (Census).
  • The share of Hispanics in poverty has topped that of blacks for the first time, 28.2% to 25.4% (Census).
  • The number of Americans on food stamps — 45 million recipients, or 1 in 7 residents — also is the highest on record (Congressional Budget Office).
  • Total government dependency — defined as the share of Americans receiving one or more federal benefit payments — is now at 47%, highest ever (Hoover).
  • The share of Americans paying no income tax, at 49.5%, is the highest ever (Heritage Foundation, IRS).
  • The national homeownership rate, now at 65.4%, is the lowest in 15 years (Census).
  • The 30-point gap between black and white Americans who own their own homes is the widest in two decades and one of the widest on record (Census).
  • Federal spending, now at 23.4% of GDP, is the highest since WWII (CBO).
  • Excluding defense and interest payments, spending is the highest in American history, at 17.6% of the economy (First Trust Economics).
  • The federal debt, at 69% of GDP, is the highest since just after WWII (CBO).
  • The U.S. budget deficit, now at 9.5% of the economy, is the highest since WWII (CBO).
  • U.S. Treasury debt has been downgraded for the first time in history, meaning the U.S. government no longer ranks among risk-free borrowers (S&P).

This is what Obamanomics has wrought. Fiscal promiscuity. Trickle-up poverty. Shared misery.

Here’s the Obama legacy in two charts:

US Labor Force Participation down 4.9 million people
US Labor Force Participation down 4.9 million people

The updated labor force participation is actually lower now than in January.

And:

Barack Obama: Budget Deficits
Barack Obama: Budget Deficits

What I find alarming is that Obama is still polling competitively with his Republican rival.

Obama lied, the economy died: comparing GDP forecasts to actual results

2011: (click for larger image)

Obama's broken promises of GDP growth in 2011
Obama’s broken promises of GDP growth in 2011

2012: (click for larger image)

Obama's broken promises of GDP growth in 2012
Obama’s broken promises of GDP growth in 2012

Story from James Pethokoukis of the American Enterprise Institute. (H/T Arthur Brooks)

Excerpt:

After every jobs report, I update the jobs forecast and chart Team Obama put out in January 2009 that projected the future unemployment rate if Congress passed his stimulus plan. It shows the unemployment rate far higher today than what Obama economists predicted back then, 8.2% vs. 5.7%.

[…][T]his White House has continually overestimated the strength of the recovery — as the charts above and below indicate (based on official White House forecasts). This says to me the problem isn’t the data going into the forecast model, the problem is the forecast model built on Keynesian assumptions about the impact of government spending and temporary tax hikes. Obama simply has the wrong model for growth.

It seems to me that the Obama approach to the economy is not to encourage the private sector to create jobs in a sustainable way by lowering corporate taxes from their 35% (highest in the world!) rate and by reducing the regulatory burden. Their plan for the last 4 years was to basically borrow money from private sector job creators to give it to their campaign donors and union supporters. Does cronyism and corruption produce produce private sector job growth? I think not. And, in fact, this is what happened.

Obama was always a drug-taking, affirmative action fraud – even before the election in 2008. That’s why he can’t release his transcripts, and why he’s never run so much as a lemonade stand in the private sector. The man is a buffoon and he has made us into a laughingstock. The only question now is whether people pay attention to charts and figures this time, instead of watch TV ads and teleprompter-assisted emotional rhetoric. It’s your choice America.