Life ain’t Grand: Owner shuts doors

Since taking over the Grand & Toy store downtown more than seven years ago, franchisee Bruce Erler earned a reputation for stellar customer service, won numerous corporate awards and held his own against fierce big-box competition.

The Kingston Whig-Standard
December 29, 2001

Life ain’t Grand: Owner shuts doors
Frank Armstrong

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Since taking over the Grand & Toy store downtown more than seven years ago, franchisee Bruce Erler earned a reputation for stellar customer service, won numerous corporate awards and held his own against fierce big-box competition.

But Erler's successes don't seem to matter.

On Monday, he and 22 other Ontario Grand & Toy franchise operators are being forced from their stores, with little or no compensation, as part of a corporate restructuring.

"When you have spent seven years building this up and they pull everything out from under you, it certainly is a little traumatic," Erler said yesterday.

He and other franchise operators, in an attempt to keep the licences to their stores, launched a lawsuit against their corporate landlord in July, but the suit is expected to take at least 2 1/2 years to go through the courts.

Now, franchisees are just hoping to be compensated for the time and money they invested in their stores and are suing Grand & Toy for $24 million in damages.

The operators claim breach of duty, breach of contract, negligence, negligent misrepresentation and breach of fiduciary duty in the suit.

The allegations are contained in a statement of claim and have not been proven in court.

They're asking for another $5 million in punitive, aggravated and exemplary damages. They also want legal costs and a declaration that the termination of their licence agreements was improper.

It's estimated the suit will cost the franchisees at least $250,000.

Despite his sadness in leaving his staff and the business he's built over the years, Erler admits he's relieved to get out.

"To be quite honest, I'm quite glad to get it over with," he told The Whig-Standard.

Relations between Grand & Toy Ltd., a division of Idaho-based multinational Boise Cascade, and its independent operators have become somewhat nasty since the operators' suit was filed in July.

E-mail accounts, which were used by franchisees to plot strategy, have been shut down and the company initially threatened legal action if operators went to the media with their story.

They did. The Whig broke the story Nov. 1.

More threats followed when franchisees told customers about the dispute via a form letter inserted in shopping bags.

One Toronto franchisee was kicked out of his store in mid-November for failing to meet a royalty deadline.

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According to the Canadian Alliance of Franchise Operators, the Toronto operator missed the deadline because he was out of the country attending his brother's funeral. Apparently, the company changed the locks on the store when the man was out.

On Monday, Erler will close his store for the last time. He won't be allowed to back in until Jan. 2, when the company does an inventory. He says he has about $100,000 in inventory on the premises.

If all goes well, he'll get that investment back, but Grand & Toy isn't volunteering to reimburse him for the thousands of dollars he said he spent on monthly leasehold improvement payments.

Brian Ward, Grand & Toy's vice-president of retail, said in an earlier interview that franchise operators have had to invest very little in their stores and that the company has paid for all renovations. Many franchisees didn't have to pay for their licences, he said.

Ward said franchisees were also notified that a number of corporate store management and contract jobs would be made available.

"They didn't offer us anything," Erler responded.

Since signing the lease for his store in 1993, Erler has maintained sales despite competition from the nearby Staples big-box store on Queen Street, and has doubled his workforce.


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