Loeb Gives 19 of Its Franchisees Notice

The company explains that given the attitude of the group of franchisees, it saw no other way to protect market share and the jobs in the stores in question…says the group intends to fight Provigo’s “bullying” tactics, contesting the company’s “simplistic interpretation” of the termination clause.

The INFO Franchise Newsletter
September 1, 1996

Loeb Gives 19 of Its Franchisees Notice

Loeb, a division of Provigo Inc., has informed 19 of its franchisees that it will be ending their business relationship in three months. The contract allows both the franchisor and the franchisee to terminate their business dealings on three months’ notice.

The company explains that given the attitude of the group of franchisees, it saw no other way to protect market share and the jobs in the stores in question.

The Montreal-based grocery chain’s move comes after a $200 million lawsuit was launched by 21 Loeb franchisees in Ontario who accused Provigo of high costs and low retail margins.

“By all appearances, if we are to believe their own statements, these franchisees are no longer interested in continuing to have business dealings with Loeb. It is therefore best to end it as soon as possible,” says Jim Robertson, senior vice-president, operations, of Loeb.

Mr. Robertson notes that Loeb plans to keep a close watch on the stores from now until the termination of the contracts, to ensure that customers receive the best service possible in the circumstances. “With regard to the employees,” he says, “we are confident they will continue serving customers as they always have.”

The franchisee’s lawyer, Charles Gibson, a partner in the Ottawa law firm of (Vincent, Dagenais, Gour Gibson, Tel: (613) 241-2701), says the group intends to fight Provigo’s “bullying” tactics, contesting the company’s “simplistic interpretation” of the termination clause.


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Risks: Lawsuits, group, Opportunism (self-interest with deceit), Termination of franchisee, mass, Canada, 19960901 Loeb gives

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