Local Country Style outlets could close

“We’re trying to level the playing field and put some basic protections in place for current and would-be franchisees. Then we can avoid some of the 5,000 court cases that take place every year in the province between franchisees and parent companies,” Martin said.

The Sault Star
December 5, 2001

Local Country Style outlets could close

Two Country Style Donuts outlets in Sault Ste. Marie may be closed as early as the end of the week in a dispute between franchisor and franchisee.

Sault Ste. Marie MPP Tony Martin calls it another example of “bad franchise deals with unscrupulous corporate owners.”

But Country Style says it is owed “significant outstanding dollars” by the outlets.

In a release late Tuesday, Martin identified Country Style as another in a series of franchisees that are in danger of having their franchise agreement defaulted without adequate protection.

Martin introduced a private member’s bill at the end of November that would amend the Franchise Disclosure Act – itself modeled partly on an earlier bill by the Sault MPP – to require a franchisor to provide six months written notice before refusing to renew of an agreement, give fair compensation and the right of the franchisee to pursue a similar business in the same location.

“We’re trying to level the playing field and put some basic protections in place for current and would-be franchisees. Then we can avoid some of the 5,000 court cases that take place every year in the province between franchisees and parent companies,” Martin said.

“Country Style Donuts has declared open season on its Northern franchise owners – and there’s nothing on the books that can possibly help these people out.”

Country Style president Pat Gibbons confirmed the outlets are among more than 20 across Canada that have been given 15 days’ notice of overdue accounts. But Gibbons said the notion that the franchisor is targeting Northern Ontario or smaller communities is “absolutely false.”

“We have issued a number of letters to franchisees defaulting their franchise agreements unless their accounts are brought current within a matter of days,” Gibbons said from his Thornhill office.

The Sault outlets, he said, have until the end of the week to come up with the “significant outstanding dollars.” Otherwise, there is a “very good possibility” they will be closed.

“This money has been outstanding for 60, 90, 120 days – I’m not here to finance independent franchisees.”

A manager of two of Sault Ste. Marie’s three outlets – on Wellington Street and Great Northern Road – would not provide a name but said the outlet could be shut down as early as today for unspecified reasons.

Sault lawyer Gerald Nori, who spoke out on franchisee rights during public hearings into the Franchise Disclosure Act bill last year, would not confirm he is providing representation for the Country Style outlets.


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