Donuts and Breach of Contract

Two very interesting cases involving franchise operations of both Tim Horton’s and Dunkin Donuts illustrate various aspects of breach of contract law.

In the first case, Tim Horton’s franchisees initiated a class action suit against the donut giant for breach of the franchise agreement stemming from procedural changes that increased their costs. In ruling for Tim Horton’s in dismissing the claims, the judge found that:

  • The contract, together with an operations manual, did allow the company to make changes to operating procedures
  • The changes were made reasonably and with due care, including a formal and well-documented process that involved consultation with franchisees

The moral of the story is: the company did its homework and was able to proceed with the changes.

In the second suit, also a group action based on breach of contract, Dunkin’ Donuts was ordered to pay damages to 21 former franchisees to the tune of over $16 million. At issue was the company’s duty to protect its brand from competition – namely Tim Horton’s onslaught on the province of Quebec. Important to note:

  • The contract specifically required the company to protect demand for its products
  • The court found that overall the franchisor had an inherent duty of loyalty toward its franchisees

Both cases are currently under appeal.

When it comes to your own employment contract, the lesson is abundantly clear:

  • Make sure the contract foresees every possible eventuality and by the same token, for you to understand the possible future effects of clauses that come into effect now
  • It’s important for both sides of the contract to act in good faith, whether or not that’s specified in the wording

Prevention is the Best Remedy

Our experienced breach of contract lawyers can advise you on how to negotiate any aspect of your all-important employment contract.

Before you sign on the dotted line – if you’re in the process or thinking of entering into an employment contract, then contact our experienced breach of contract lawyers for advice. Clarity on the issues covered by a contract is your key to understanding your rights.

Your Employment Contract

You may not be a high end Bay Street trader, but if you’re already working under an employment contract, you’ve negotiated the terms for any number of good reasons and they’re all important. If you feel your employer has neglected to follow through on their side of the obligations in any way, you owe it to yourself to get the best advice.

You only have a limited time to take action in a breach of contract case. If you think your rights under a contractual agreement are being disregarded contact Petrillo Law today for a free consultation with an experienced contract lawyer.

Get the Legal Representation You Need

Know your rights. Contact the breach of contract lawyers at Petrillo Law today by calling (905) 949-9433.  We look forward to hearing from you.

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