Tim Hortons’ franchisees don’t expect “one iota” of change after executive shuffle: Lawyer
The lawyer representing Tim Hortons' franchisees in a class-action lawsuit against parent company Restaurant Brands International (QSR.TO) says the recent shuffle of a top executive will have no impact on the pending litigation.
“The ownership and strategy of the company has not changed. We do not expect to see one iota of difference with the replacement of one executive in favour of another,” said John Sotos, the Toronto-based lawyer representing a group of franchisees seeking $500 million in damages.
Elias Dias Sese stepped down as Tim Hortons' president on Monday and took on the role of president of international expansion. CEO Daniel Schwartz will take over his responsibilities.
The move came as a Tim Hortons franchisee filed suit in Ontario Superior Court against the coffee and donut chain, claiming the company improperly used money from a national advertising fund.
The lawsuit claims that since RBI acquired Tim Hortons in 2014, its subsidiary TDL Group “funnelled money to itself” by improperly charging administrative and operational expenses to the advertising fund.
All franchisees are required to contribute to the fund, which is used to pay for advertising, marketing and promotion.
The allegations have not been proven in court. “We vehemently disagree with and deny all the allegations,” RBI said in a statement.
The suit became necessary after company managers refused to share information about the use of the fund, Sotos told BNN. “This is a piece of litigation that need not have happened,” he said. “It’s only after repeated failure to talk to [franchaisees] and get answers that the litigation was commenced.”