Montreal (Canada) - Fasken Martineau, a leading international business law and litigation firm, announced that the firm has won an important ruling in the Quebec Court of Appeal for its clients former Dunkin’ Donuts franchisees. This is the second major victory the firm has won on behalf of its clients since the legal saga began in 2003, and the most significant Quebec franchise case in recent history. The former franchisees have been represented up until now by Fasken Martineau Montreal litigator Frédéric Gilbert with assistance from the Honorable Jean-Louis Baudouin, also a litigator at the firm’s Montreal office.
The former Quebec franchisees were suing Dunkin' Brands Canada Ltd. for incompetence, negligence, lack of support and flagrant breach of the contract entered into between the franchisor and franchisees in regards to the brand’s protection and development between 1995 and 2005. With legal interest and fees, Dunkin' Brands should be paying plaintiffs a total of $18 million.
"This judgment, whose relevance has just been confirmed by the Court of Appeal, will have a lasting influence on the obligations of franchisors not only to the franchisees belonging to their banner, but also to the brand itself by taking reasonable measures to support it in a highly competitive environment," said Fasken Martineau’s Frédéric Gilbert, a franchise law expert located at the firm’s Montreal office.
The court recognized that the franchisor owes implied obligations to the franchisees, individually, as well as to its entire network. Although this obligation already exists under existing case law, it has now been specified in this unprecedented ruling. As a result, a franchisee can now directly demand that the franchisor take reasonable measures to impose standards of quality and cleanliness throughout its network. Under some circumstances, "reasonable measures" could even include legal proceedings.
Added Frédéric, “Each franchisee needed a lot of courage to pull through this situation, and they are very proud that they did not give up against a much larger adversary despite the challenging effects on their businesses and lives. They have not emerged unscathed, but at least they have two judgments in their favour confirming that they will receive compensation.”
Frédéric Gilbert is a senior partner in Fasken Martineau’s Litigation & Dispute Resolution practice group and is widely recognised for his advocacy skills in the area of franchise law. He is the author of the latest reference work on Quebec franchise law, Le Droit de la Franchise au Quebec. The Honourable Jean-Louis Baudouin is an internationally-renowned legal scholar and a former judge of the Quebec Court of Appeal. He is also a strategic adviser in the firm’s Litigation & Dispute Resolution Group.
About Fasken Martineau
Fasken Martineau is a leading international business law and litigation firm. With more than 770 lawyers, the firm has offices in Vancouver, Calgary, Toronto, Ottawa, Montréal, Québec City, London, Paris and Johannesburg. For additional information, please visit the firm's website at www.fasken.com.