Country Style Donuts franchise owners fighting closures

But when a representative of Country Style’s head office showed up at his store Thursday morning, Moore acting on the advice of a lawyer, asked the representative for a court order. The individual did not have one and left.

The Sudbury Star
December 7, 2001

Country Style Donuts franchise owners fighting closures
Company president claims stores are losing money, but their owners dispute that
Bob Vaillancourt

Negotiations are under way between the owners of two Country Style Donuts franchises in the city and the parent company that would have the franchises take over the store leases and operate the businesses under a new name.

Marlene Laframboise, who operates the store on LaSalle Boulevard, and Don Moore, who has the Kingsway location, were to have closed their businesses Thursday. But when a representative of Country Style’s head office showed up at his store Thursday morning, Moore acting on the advice of a lawyer, asked the representative for a court order.

The individual did not have one and left.

The same scenario was expected to take place later in the day at Laframboise’s store on LaSalle, however on one showed up, she said.

“I have my life savings (invested) in this store,” said Laframboise, who has operated the franchise for more than 13 years.

Company president Pat Gibbons said the chain is closing the stores because they are not making money. But both Moore and Laframboise say they could make money if they were free of their obligations to Country Style.

Norma Moore said she and her husband are forced to pay as much as 40 and 50 percent markup on some of their supplies because they have to buy them from the parent company rather than on the open market.

“The 450 franchisees are all in the same situation. We have to buy product from Country Style.”

“With a 40 and 50 per cent markup, there is absolutely no way a franchise can make money with these stores.”

Moore and Laframboise were among owners of a group of Country Style franchisees that met Wednesday in Parry Sound to discuss their collective predicament.

A committee is to be formed from that meeting, said Moore.

Moore said customers of his store are “very supportive. They have been coming in and wishing us good luck.”

“They know that we are trying to take over the lease and they are being very loyal. Everybody has been so supportive.”

Laframbosie also said she has been receiving “tremendous support” from her customers. “I have customers who started coming here when they were in high school and are still coming here,” she said.

Moore said officials with the company’s head office have told his lawyer the agreement to transfer for the leases could be drafted within days.

Laframboise said she is hoping that will take place before the company shows up with a court order to force her to close.


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Risks: Franchisee abandons their investment, Independence, Lease controlled by franchisor, Sunk costs: franchisee's trapped capital keeps them chained to treadmill, Life savings gone, Must buy only through franchisor (tied buying), Gouging on supplies,Canada, 20011207 Country Style

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