Canadian pharmacists fighting Target Canada, Francine Kopun

Winnipeg pharmacist Charles Scerbo was familiar with Target stores in the U.S. and how busy they were. “I thought, if they operate stores here like they do in the U.S., it’s a slam-dunk,” he said. He was told to expect to be filling up to 400 prescriptions a week by the second year. “It never materialized. They failed from the beginning,” he said.

The Toronto Star
February 3, 2015

Canadian pharmacists fighting Target Canada
Pharmacists feel their deals with Target Canada have left them high and dry.
Francine Kopun


Stavros S. Gavrilidis, Target pharmacist franchisee in Windsor, Charles P. Scerbo, pharmacist in Winnipeg, and Dan D. Dimovski, business partner, are fighting mad about the way they are being treated by Target as it winds down Canadian operations. Bernard Weil/Toronto Star

Stavros Gavrilidis had been operating a successful independent pharmacy in Windsor for more than 20 years when he got a glossy postcard from Target, inviting him to become a franchisee.

At the time he was working about 45 hours a week at his own store, ringing up $1.8-million a year in sales and bringing home between $120,000 and $150,000 for himself.

He liked the idea of moving his operations into a Target at the Devonshire Mall in Windsor. He thought it would be better for his customers, too.

Target was promising plenty of foot traffic and strong financial results for the pharmacy franchisees operating within its stores – as much as $300,000 in annual income after five years.

Franchisees were told to be ready to hit the ground running as the first weeks were the most critical in building up a client base, said Gavrilidis.

Instead they were hampered by fax machines that didn’t work on the first day, making it impossible to fax doctor’s offices for prescriptions. The computer software they had to use was relatively untested and difficult to operate, said Gavrilidis.

The stores were empty and the shelves were bare.

“They basically set up hurdles in front of us instead of giving us open lanes to run,” he said.

Now pharmacy franchisees have been told they have to leave by February 27, a deadline they say they can’t possibly meet.

Competitors who are aware of their situation are offering them a fraction of what their client files are worth – as little as $1-$2 a file instead of the market value of $17, said Gavrilidis.

“It’s like a fire sale,” he said.

Target wants to close all 133 stores in Canada by May 15 at the latest, and approximately three dozen stores by March, after a botched, $7-billion attempt to expand outside the U.S.

Target Corp. set aside $90 million to pay the 17,600 people who will be left jobless when stores close, but pharmacy franchisees say they are being left high and dry.

Canadian pharmacists who bought franchises to operate inside Target stores thought they were getting into a great partnership.

Instead, some of them struggled so badly they required what they came to call ‘welfare’ payments from Target to stay afloat, after the promised foot traffic and sales failed to materialize.

Winnipeg pharmacist Charles Scerbo was familiar with Target stores in the U.S. and how busy they were.

“I thought, if they operate stores here like they do in the U.S., it’s a slam-dunk,” he said.

He was told to expect to be filling up to 400 prescriptions a week by the second year.

“It never materialized. They failed from the beginning,” he said.

In all, 81 pharmacist franchisees have joined the Pharmacy Franchisee Association of Canada (PFAC) seeking a better deal from Target.

The organization has hired legal counsel to try to get pharmacists more time to transfer their operations and they are seeking an unspecified amount of financial compensation.

“They’re not allowing us ample time to close down,” said PFAC president Dan Dimovski.

“Target is undermining, without regards to the consequences, the Canadian public health care system as it relates to the ability to provide ongoing continuity of care to patients.”

The organization is raising awareness of the problem with provincial compliance and regulators such as The College of Pharmacies.

Contacted late in the day for a response, Target was unable to respond in time for this story’s deadline.

Risks: $50,000 Ontario Appeal award for one franchisee's pain and suffering, 95 per cent of legal fees are paid by franchisors, Activism over the internet, Advice from franchise lawyer only, Agree with proposed law or you get nothing, Anonymous: leaderless on-line resistance subculture, Appropriate franchise law, Arthur Wishart Act (Franchise Disclosure), 2000, Canada, Arthur Wishart Amendment Act (Franchise Disclosure), 2010, Canada, Attorney seeds the destruction of his own client's case, Bad faith and unfair dealings, Bank calls in debt, Bank won't finance deal because they know something you don't, Banks are industry cheerleaders, Big Franchising, Big Pharma, Blame themselves, Blocking for the industry, Blogs: most effective means to justice, Brand backlash: franchisees suffer because brand owners screw up, Breach of duty, Business model had never created adequate investor returns, Buying a job, Call for a public enquiry, Call for franchise law, Canada Small Business Financing program, Cannon fodder, Career Limiting Move, CLM, Caveat emptor canard, Class action only as good as the lawyers involved, Coerced waiver of punitive damages, Commercially reasonable exercise of discretion, Companies' Creditors Arrangement Act, CCAA, Contingency fees, Contracts seen as unenforceable or void, Courts extremely picky about shoddy disclosure practices, Credence good fraudulent expert, Credence goods: taking advantage of the innocents, Cruelest lies are often told in silence, Disclosure document must disclose all material facts, Dispute resolution means franchisee goes broke, Don’t owe your lawyer money, Don't use a brand name franchise lawyer, Down-and-dirty CCAA, Employees misclassified as franchisees or independent contractors, Exponential increase in franchise bar services ($ and influence), Externalities: cheap business decision when someone else pays, Fair dealings: treat assets as if they were their own, False assumptions, multiple, Federal insolvency laws used to shirk legal claims, Fee reduction always has a catch, Fee surprises at settlement time, First we kill the lawyers…, Franchise banker, Franchise bubble will crash much harder (non-franchised), Franchise bar: Serving those most able to pick up the tab, Franchisee consultant, Franchisee leader, Franchisee revolt, Franchisee-on-franchisee opportunism, Franchisees are practice clients that help keep the lights on until franchisor clients show up, Franchisees dragged into complex legal dispute their franchisor created, Franchisee, independent contractor or employee?, Franchising Opportunism paper, Franchisor abandonment, Franchisor controls both wholesale costs and retail prices, Franchisor insolvency, intentional, Franchisor knew they were selling money losing concepts, Franchisors want the minimum regulation they can get away with, Fraudulent non-disclosure, Frenzied lobbying, Futility of taking legal action, Good faith + fair dealings = false hope, Government guaranteed loans, Government guaranteed loans, abolish program, Government guaranteed loans used a great deal in franchising, Government guaranteed loans, massive loan defaults, Government guaranteed loans: program loses $1, franchisee families lose $10, Gripe sites, Hacktivists: internet social justice activists, Hates publicity, Harassment, Intimidation, Hope springs eternal in the hearts of the delusional, Ideas once outrageous are now considered normal, Imbalance of information and power, Immigrants as prey, Independent franchisee association, Independent franchisee association betrayal, Individuals with a very successful career history, Industry Canada, Insolvency strips employees' severance payments, Insolvency trustee, consultant and auditor same firm, Intentional franchisor insolvency creates huge fees for legal, accounting, consulting firms, Internet information sharing, Investors steered to specific attorney, Jealously guarded monopoly on the provision of legal services, Joint Employer: franchisor legally liable along with franchisee for labour violations, Knew or could have reasonably been expected to know, Lawsuits, individual, Lawyering up without 2nd opinion is a trap, Lawyers can serve franchisors or franchisees, never both, Leaderless Franchise Network, LFN, Leadership development, Lease obligations make franchisees pay even if not in business, Lender's due diligence not done properly, Lending duty, Lending duty never enforced via regulation or litigation, Lending is subject to expert fraud because it is a credence good service, Loan repudiation, Loser pays court costs, Material facts were not disclosed, Materially misleading information, McLaw: toothless legislation designed to protect the dominant parties, Ministry of Government and Consumer Services, Ontario, Mom-and-Pop franchisees at greatest risk, Money influencing public decision-making, Moral Hazard: a party insulated from risk behaves differently than if the full risk were present, Most lucrative form of commercial lending, franchising, Network effects: unintended consequences when dealing with communities, No real penalties for abuse of federal insolvency laws, Odious debts, Office of the Superintendent of Financial Institutions, Canada, Ombudsman for Banking Services and Investments, Canada, On Cooling the Mark Out (Erving Goffman), One franchisee turned against the other (action very difficult), Online reputation grows exponentially, Operating losses from Day 1, Opinions at odds with the Minister, Opportunism Test: If asset ownership were reversed, would decision likely change?, Overconfidence effect, Pawns in a game they can't win, Political champions, Predatory franchise lending, Privacy laws violated, Punitive, exemplary and/or aggravated damages, Regulatory capture breeds its own incompetence, Reputational risk, Restructuring legislation is deficient. Reverse onus on good faith and fair dealing, Right to associate and right to harass, Rules for Radicals: make them play by their own rules, Secured creditors (banks) 100% covered in dodgy insolvency, Settlement just covers fees, Shame - humiliation emotion, Sharecropping, Shareholder activism forces franchisor action, Sincere ignorance, Situationism psychology: people are influenced by external factors more than internal traits, Social media triggers unskilled franchisor reaction, Social proof: in new situations, you assume others know more so you follow their lead, Sophism: an argument used to deceive, Spouse can sue for losses also, Spouse dragged into negative investment, Spouse needs independent advice, State refuses to even listen, State sanction, Stores shuttered, Strategic lawsuit against public participation, SLAPP, Sub-prime lending practices done in franchising, Sue lender for failing to do their lender's due diligence, Sue the lawyer that created the disclosure document, Sunk Cost Fallacy: very hard to resist putting good money after bad, Sunshine is the best disinfectant, Suppliers and landlords act as if they were the franchisor, Symbiotic relationships (industry, banks, lawyers), Talk to former franchisees, Taxpayers end up paying for private gain, Test for franchisee, independent contractor or employee, The burned hand teaches best, The Fixer fixes for a hefty price, The key is to commit crimes so confusing that police feel too stupid to even write a crime report about them, Thin-skinned politicians not doing their duty, Threats against supporters of franchisee association, Trade association fronts and defends best and worst franchisors, Unskilled and unaware bias (Dunning–Kruger effect), Vacuum of information favours dominant party, Wage theft, Victims are highly intelligent and educated, War of attrition, What does the independent franchisee association say?, White-knight lawyer turns black, Who pays for the research?, Wiki: a franchisee-created wiki made from your franchisor's documents, Wives free to sue franchisor, Write a letter of complaint, Canada, 20150203 Canadian pharmacists

Unless otherwise stated, the content of this page is licensed under Creative Commons Attribution-ShareAlike 3.0 License