Doughnut dreams turn sour

DOUGHNUT shop juggernaut and Canadian icon Tim Hortons is at the centre of a bitter court battle in Winnipeg this week in a case that allegedly destroyed a city family who bought into two of the chain's coffee shops a decade ago. Members of the family will come face-to-face in Court of Queen's Bench courtroom as they and Tim Hortons square off over who was responsible for the money-losing venture.

Winnipeg Free Press
February 13, 2008

Doughnut dreams turn sour
Bruce Owen

DOUGHNUT shop juggernaut and Canadian icon Tim Hortons is at the centre of a bitter court battle in Winnipeg this week in a case that allegedly destroyed a city family who bought into two of the chain's coffee shops a decade ago.

Members of the family will come face-to-face in Court of Queen's Bench courtroom as they and Tim Hortons square off over who was responsible for the money-losing venture.

At stake is potentially hundreds of thousands of dollars and the reputations of Tim Hortons and the Zaborniak family, who 10 years ago bought into the dream only to see it turn into a financial and personal nightmare, lawyer Gene Zazelenchuk said.

He said the case began innocently enough in the mid-1990s when his client, Cheryl Zaborniak, and her mom Irene decided to use a modest lottery win to invest in the family's future, choosing to sell Double-Doubles and glazed doughnuts.

In court documents, Cheryl Zaborniak said she first wanted a Tim Hortons franchise in British Columbia, but was convinced by company officials at the TDL Group Ltd., the parent company of Tim Hortons, to buy a franchise in Winnipeg first. Cheryl Zaborniak agreed, and pooling family and money from the bank, paid $290,000 for a Tim Hortons licence and location at 1060 Henderson Hwy. Her brother Kevin signed on as manager of the outlet and her other brother Chris as baker.

Zazelenchuk said they thought each store would gross $700,000, a portion which would be shared with TDL Group, but instead the franchise operated at a loss at all times.

Cheryl Zaborniak claims rather than pack it in, TDL Group Ltd. convinced them to open a second location, this one at 1404 Regent Ave. They did, and this one also operated at a loss.

The family also claims TDL Group next wooed Kevin Zaborniak from them to manage a third location, this one at a city Revy store. This was done, the family claims, without them knowing about it and at the expense of the other two outlets.

By 1998 TDL Group sued the family for about $105,000 for non-payment of Tim Hortons products, service fees and advertising costs. The family counter-sued, claiming Tim Hortons is entitled to nothing as they were misled in how profitable the doughnut chain was as it competed against rival Robin's. They're suing for unspecified damages.

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Copyright F.P. Canadian Newspapers Limited Partnership Feb 13, 2008
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