Butland spotlights Loeb difficulties in Toronto sessions

“We’re trying to raise the profile of this issue otherwise (corporate takeovers) could go very quickly and quietly and I think that’s exactly what Provigo would like to see.”…Ontario franchisees are particularly vulnerable to being ousted because there’s no provincial legislation that provides minimum standards in franchise agreements.

The Sault Star
August 4,1996

Butland spotlights Loeb difficulties in Toronto sessions
Patti Murphy

Sault Ste Marie Mayor Steve Butland pushed the Loeb franchisee travails onto the agenda at the annual Association of Municipalities of Ontario conference in Toronto.

Concerned about the possible implications of a corporate takeover of the two Loeb stores in Sault Ste. Marie and 17 others in the province, Butland pulled together a meeting of 10 other mayors to discuss ways of helping franchisees retain their stores.

The result is that municipalities as large as Ottawa and as small as Armprior will be asked to table a resolution encouraging the Ontario government to take a look at this situation, Butland said from his Toronto hotel.

Sault Ste. Marie city council will be voting on the resolution at its regular meeting on Monday.

“We’re trying to raise the profile of this issue otherwise (corporate takeovers) could go very quickly and quietly and I think that’s exactly what Provigo would like to see.”

Loeb Golden Mile owner Larry Cairns and Korah Loeb owner Mike Williamson, along with Blind River Loeb operator Paul Monette, are among the 21 Loeb franchisees suing Provigo Inc. and its Loeb Inc. Division for $200 million claiming they have been squeezed for years with high wholesale costs.

Nineteen of these franchisees, including Cairns, Williamson and Monete have been notified by Provigo that their franchise agreements will be terminated by Nov. 2 because of debts they have incurred with the company.

Butland said the cancellation of the franchise agreements with the Loeb stores in Northern and eastern Ontario is of “major concern” because some layoffs could ensue.

Butland also said that the community involvement in these stores would likely be curtailed in a corporate environment.

“Many local charities have benefited from our local Loeb stores.”

Butland said he decided to take action after Cairns and Williamson asked him to get involved.

Cairns employs about 130 full and part-time staff at the store, which he has owned and operated for the last seven years and Williamson employs about 100 full and part-time staff at his six-year old store.

In a previous interview, Williamson noted that 400 layoffs resulted in the cost-cutting that followed Provigo’s takeover of 47 of 111 Loeb stores in its London, Sudbury and Ottawa divisions.

“We always have a concern when a parent company is at odds with the franchisees but we’ve attempted not to meddle in their business,” said Robin McArthur, the Sudbury-based Canadian director of the Retail Wholesale Union, which represents Loeb workers.

While McCarthur noted that none of these 400 jobs were union positions, he said the union would continue to monitor the situation.

The Elliot Lake Loeb store went corporate last year and thus far, no union members have been laid off, he said.

Ontario franchisees are particularly vulnerable to being ousted because there’s no provincial legislation that provides minimum standards in franchise agreements.


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