Store owners howling mad

The store owners want to remain open and continue tending to the whims of pampered pets, but they want to step away from the Bark & Fitz name. They also stopped paying royalties to Bark & Fitz.

The Toronto Star
May 27, 2010

Store owners howling mad
Owners of upscale canine franchises pursue a legal battle to sever themselves from the company brand
Emily Mathieu

Bark&Fitz.jpeg

The owners of Bark & Fitz stores are trying to separate themselves from the company name. TORONTO STAR FILE PHOTO

Pampered canines who have become accustomed to high-end biscuits could be in for a bit of a shock.

The owners of Bark & Fitz stores, a high-end franchise dealing in luxe doggie products and known for selling treats in bakery-style cases, are trying to separate themselves from the company name.

According to court documents, the store owners allege the company founder violated the terms of contracts they signed when joining the franchise, by essentially forcing them to carry volumes and styles of products they feel interfere with their bottom line.

They also allege the founder misused a pool of advertising funds they paid into and marked up products without telling them and making them difficult to sell.

The store owners want to remain open and continue tending to the whims of pampered pets, but they want to step away from the Bark & Fitz name. They also stopped paying royalties to Bark & Fitz.

According to documents from an Ontario Superior Court proceeding in March, a judge found “evidence that the franchisor acted for its own financial benefit and to the financial detriment of the franchisees and thus breached its duty of good faith and fair dealing.”

But, the judge denied the stores’ request to severe themselves from the brand, pending trial, as that would cause “irreparable harm” to Bark & Fitz, court heard. Mark Adilman, representing the head of Bark & Fitz declined to comment.

Jeffrey Hoffman, a lawyer who represents some of the store owners said no date has been set for trial but some owners are trying to fight the ruling.

On Thursday, a judge dismissed a motion by some of the store owners to appeal the injunction preventing the stores from stepping away from the Bark & Fitz brand, said Hoffman.

Hoffman said according to the decision March ruling, store owners have been ordered to continue to pay royalties, but 20 per cent of the royalties are being place in a trust pending the outcome of the case. The judge also ruled that any products sold by the franchisor cannot have any mark up on them pending trial, said Hoffman.

The store owners allege the franchisor was attempting to hold all owners to contracts signed after 2007 that allowed the franchisor to say what store owners could sell and in what volume. Many owners had not signed those contracts, Hoffman said.

With three Toronto locations, the stores are a hot spot for tony pooches and their devoted owners. As distracted dogs sniffed eagerly at the display case, owners could pick up a variety of luxury toys and accessories for their pets.

Messages left for owners at several local Bark & Fitz stores were not returned, or store managers declined to comment. Several dogs were heard barking in the background, but the noises could not be deciphered.

The battle over Bark & Fitz started in early 2009. That, the owners allege, was when the franchisor delivered inventory without store owner’s permission and delisted popular items not connected to the Bark & Fitz brand.

By May the store owners had formed an association in protest and eventually refused to carry some products after “discussions” broke down, court documents showed. In December, the store owners stopped paying royalties and announced their intention to drop the brand.

http://www.thestar.com/business/article/815606--bark-fitz-store-owners-are-howling


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