Montréal (Canada) — After a legal journey that began back in 2003, the 21 former franchisees that ran 32 establishments under the Dunkin’ Donuts banner in Québec can finally see the light at the end of the tunnel. Dunkin’ Brands will now be required to pay the plaintiffs nearly $18 million, an amount that includes interest and legal costs.
In a unanimous decision handed down in April 2015, the Court of Appeal upheld the Tingley ruling that found in favour of the former franchisees from Québec, who were suing Dunkin' Brands Canada Ltd. for incompetence, negligence, lack of support and assistance, as well as flagrant breach of the contract entered into between the franchisor and its franchisees regarding the brand’s protection and development between 1995 and 2005. On April 15, 2015, in a unanimous decision, the Court of Appeal maintained the first instance judgement (except for damages, which were reduced) and expressed the following:
“Beyond the obligation to allow individual franchisees to use the Dunkin’ Donuts system, the contracts’ express language and necessary implication created a duty owed to the franchisees collectively to take reasonable measures to support and enhance the brand. This included the duty to respond with the measures needed to help the franchisees as a group to meet the market challenges of the time and to assist the network of franchises by enforcing the uniform standards of quality and cleanliness it holds out as critical to the success of the franchise.”
According to Mtre Frédéric Gilbert (Fasken Martineau), who has been representing the former franchisees since this legal saga began in 2003, it is a huge victory for the former franchisees. “It took pride and courage to stand up to a player with far more financial resources than they had and despite the negative impacts on their businesses and lives. They have not been left unscathed, but at least they have two judgments in their favour confirming that they will be compensated,” concluded Mtre Gilbert.
About Fasken Martineau
Fasken Martineau is a leading international business law and litigation firm. With more than 700 lawyers, the firm has offices in Vancouver, Calgary, Toronto, Ottawa, Montréal, Québec City, London and Johannesburg. For additional information, please visit the firm’s website at www.fasken.com.
Source: Fasken Martineau
For more information:
Mtre Frédéric Gilbert
514 397-5232, cell: 514 262-0930