A group of Second Cup Ltd. franchisees is suing the Canadian coffee chain for $2.7 million, alleging the company’s actions have been detrimental to them.
The current and past franchisees outline a long list of complaints against their franchisor in a lawsuit filed earlier in December 2018 in the Superior Court of Quebec.
None of the allegations has been proven in court, and the company declined to comment.
While the company has seen positive change over the past three years as it has attempted to win back customers, franchisees continue to suffer, according to the lawsuit. The company allegedly misused a franchisee-funded advertising reserve, it said. Franchisees must pay the equivalent of 2 to 3 per cent of their sales to the ad fund.
“Second Cup does not use this money in an adequate manner to advertise and fails to fulfil its contractual obligations to that end,” read the court documents.
The plaintiffs also alleged product problems, including being required to purchase products at a “far higher” price than what they are worth on the market, stock shortages thanks to supplier changes, and “problematic” food quality