Novus auto glass dispute ends out of court

…left them competing with Apple and Speedy for the same customers and the attention of their new parent company. The franchisees alleged TCG breached their franchise agreement, hindered business operations, stopped supporting them and formed a conspiracy to interfere with their economic interests… claimed TCG’s moves triggered serious personal financial losses and emotional suffering. They sought more than $4.8 million, including punitive and aggravated damages.

The Toronto Star
August 24, 1999

Novus auto glass dispute ends out of court
Details of deal with franchisor stay confidential.
Tony van Alphen

Six former auto glass franchisees have reached a settlement in their 4½-year lawsuit against TCG International.

A lawyer for six Novus franchisees in Ontario confirmed yesterday they had agreed on an out-of-court deal recently concerning allegations of contract breaches and mistreatment by Vancouver-based TCG.

However, lawyer John Sotos, whose firm represented the franchisees, said the deal contains a confidentiality clause that prohibits either side from disclosing or commenting on the terms of settlement.

They agreed on terms after three days of mediation with George Adams, a retired judge and prominent mediator.

“The matter was resolved through the mediation process and the efforts of Mr. Adams in particular,” said Sotos.

The settlement negated a trial that the franchisees had anticipated would be held in Ontario Supreme Court this fall. The case had dragged through the courts since November, 1995.

In their claim, the franchisees said their auto glass businesses in the province deteriorated following TCG’s purchase of the Novus chain in Canada and the U.S. in late 1993.

TCG already owned the rival Apple and Speedy auto glass replacement chains.

The Novus franchisees said the situation left them competing with Apple and Speedy for the same customers and the attention of their new parent company.

The franchisees alleged TCG breached their franchise agreement, hindered business operations, stopped supporting them and formed a conspiracy to interfere with their economic interests.

The franchisees claimed TCG’s moves triggered serious personal financial losses and emotional suffering. They sought more than $4.8 million, including punitive and aggravated damages.

TCG denied the allegations and said it had met all obligations under franchise agreements.

The company said in its statement of defence that the franchisees “entirely caused or substantially contributed” to their losses by failing to aggressively market Novus products and conduct repairs properly.


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Risks: Gag order (confidentiality agreement), Ineffective marketing, No franchisor support, Award-winning franchisees, Lawsuits, group, Symbiotic relationships (industry, banks, lawyers), Broken relationships, ruined lives and alienated children, Sabotage, Franchisor abandonment, Franchisee decision, bankruptcy, Corporate stores competing with franchisees, Lost homes, Veil of secrecy, Mediation, Emotional collapse, Franchisee decision, abandonment, Franchisee decision, independence, War of attrition, Must buy only through franchisor (tied buying), Broadcast facsimiles to U.S. franchisees, Fee surprises at settlement time, Settlement just covers fees, Fee surprises at settlement time, Corporate stores competing with franchisees, Cannibalization of sales, Blame the franchisee, Canada, 19990824 Novus auto

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