The former CEO of Tim Hortons denies he provided confidential information to one of Canada’s national newspapers after the coffee-and-doughnut chain’s parent company commenced legal action against a rogue group of franchisees it alleges were Don Schroeder’s informants.
“In preparing my recent statement to the Globe and Mail I neither received confidential Tim Hortons information from the (Great White North Franchisee Association) nor did I disclose any confidential Tim Hortons information,” Schroeder wrote in an email.
A correspondence from Schroeder is quoted in a Sept. 15 story about franchisees asking for price increases to offset upcoming minimum wage price hikes in Ontario and Alberta.
The chain’s parent company, Restaurant Brands International, is accusing board members of the GWNFA of providing Schroeder with confidential information that he allegedly gave to the newspaper, the association said. The GWNFA plans to seek legal action against the company next week.
It’s the latest development in an ongoing battle over the company’s direction and management since RBI acquired the chain in 2014 — three years after Schroeder abruptly left the company’s top post.
TDL Group Corp., an RBI subsidiary, served default notices to all of the GWNFA’s board members on Sept. 18, according to a letter to Jon Domanko, RBI’s head of legal, that was posted to the association’s website.
“There is a small group of restaurant owners who continue to breach their licence agreements by leaking confidential and competitively sensitive business information to the media,” a Tim Hortons spokesperson wrote in an email.
Their actions “unfairly and negatively” impact other franchisees and the company has “taken appropriate action,” the spokesperson said.
In the letter, GWNFA president David Hughes denies the allegations that board members provided Schroeder confidential information that he allegedly passed on to the Globe.
“That is false and we know of no facts to support the same,” Hughes wrote. He acknowledged Schroeder may have communicated with the newspaper, “but he did not provide any confidential information to them.”
Schroeder, who is not one of GWNFA’s nine board members, did not receive a default notice.
However, he said in an email that he was prepared to act as a spokesman for the association until RBI “reminded” him “any affiliation with the association would be a breach of the agreement I signed in 2011 when I retired.”
Hughes accused the company of trying to intimidate franchisees, who formed the association in March amid complaints by members that the parent company was using its power to extract more profit from them.
The company is “interfering with franchisees’ right to associate and directly or indirectly penalizing or threatening franchisees who choose to associate,” he said, threatening legal action that includes a claim seeking damages.
Patricia Jameson, a spokeswoman for the GWNFA, confirmed the association’s legal team will file a claim next week.
The association declined to comment further, and GWNFA counsel Peter Proszanski of Toronto-based law firm Himelfarb Proszanski did not return a request for comment.
RBI has expressed resentment toward the franchisee group for airing its concerns publicly.
CEO Daniel Schwartz has previously said he’d prefer if the group relayed its views privately. Despite previously snubbing direct contact with the association in preference of the company’s elected franchisee advisory board, he met with some of the GWNFA’s members several months ago.
However, those talks failed to resolve the issues as one of the association’s members later moved to launch a class-action lawsuit alleging RBI is improperly using money from a national advertising fund. The allegations have not been proven in court.
RBI has said in a statement that it vehemently disagrees with and denies all of the allegations.