Tim Hortons franchisee settles suit over licence dispute, leaves company

A Tim Hortons coffee shop in downtown Toronto is pictured on Wednesday, June 29, 2016. (File / THE CANADIAN PRESS)

A Tim Horton's franchisee who had brought legal action against the chain's parent company has settled his suit and severed his ties to the company.

Mark Kuziora operated two locations in Toronto and was an outspoken member of the Great White North Franchisee Association, an unsanctioned franchisee group started more than a year ago. He was also the lead plaintiff in a class action against Restaurant Brands International Inc.

He filed a $4 million lawsuit against RBI after the company allegedly refused to renew a licence for one of his two stores in bad faith. RBI maintained it was right in its decision not to approve a new restaurant agreement, which expires at the end of August.

Kuziora met with Tim Hortons president Alex Macedo several weeks ago, said Duncan Fulton, RBI's chief corporate officer.

The pair had a productive conversation and signed an agreement settling the suit about two weeks ago, he said.

"We certainly believe that it's in everyone's best interest," he said.

Kuziora sold his two locations back to the company, Fulton said, and a new franchisee will take over operating them.

Fulton would not disclose any terms of the settlement.

GWNFA broke its silence on the issue in a letter to members from president David Hughes that said the group had been asked to remain silent while lawyers worked out a deal.

"We tried everything to have RBI rescind Mark's situation, but to no avail," Hughes wrote. "We have suspicions that their only goal was to send a message to our board!"

This was a settlement between Kuziora and Macedo, and nobody else, Fulton said when asked to respond to the allegations within the letter.

RBI has had a fraught relationship with some of its franchisees in recent months.

A group of them banded together to form GWNFA, which now also boasts an American chapter and claims to represent about half of franchisees in Canada and the U.S. The group works to give a voice to franchisees concerned about alleged mismanagement.

RBI has been reluctant to talk to GWNFA representatives. Instead, the company chooses to rely on its elected franchisee advisory board, whose scope it expanded in recent months in an effort to ease ongoing tensions.

The company said Macedo and his leadership team will continue to work with the advisory board after the president for Tim Hortons Canada, Sami Siddiqui, accepted a new role as chief financial officer for its Burger King brand.