Tim’s Hit With Frozen Doughnut Lawsuit

Calgary Herald:

Always Fresh’ apparently has its price, as doughnut king Tim Hortons is finding out the hard way.

The icon of Canadian franchising has been hit with an attempted $1.95-billion class-action suit over its conversion from a ‘fresh-baked’ goods restaurant to a ‘microwaved products store.’

In a statement of claim filed in an Ontario court, 2 Burlington, Ont., franchise owners are suing the head office on behalf of all Tim Hortons franchisees claiming that the move to an off-site supply chain involving frozen doughnuts hasn’t made them any more money. Rather, they argue, it has driven up the fixed costs of a doughnut from 9 cents to 20 cents without increasing sales.

Moreover, the 2 franchisees claim that ‘a more extensive lunch menu’ featuring soups and sandwiches have allegedly earned them only a ‘minimal profit, and in some cases no profit at all…’

They say the lunches have become increasingly popular; however, they have ‘unreasonably low margins’ and drive up operating costs because stores have to hire staff to serve them.

They are claiming… read on.