Posted by & filed under Contemporary Business Issues.

Description:  Many of us have heard about Tim Horton’s franchisees suing parent franchisor, Restaurant Brands International. But now comes word that franchisees of Second Cup are suing their head office as well. Franchisees are unhappy with their profit performance, arguing that the parent’s use of an advertising fund may have harmed them. Franchisees are also upset that head office has not helped them make up market share lost to other chains.

Date:  November 26, 2018

Source:  cbc.ca

Link: https://www.cbc.ca/news/business/second-cup-coffee-1.4921332

 

Discussion points:

1)  How do you rank Second Cup among Canada’s coffee chains?

2) Given that it probably impacts the public image of a brand like Second Cup or Tim Horton’s, why do you think we are seeing these cases of franchisees suing franchisors?

3) In chapter nine of Wiley’s Financial Accounting: Tools for Business Decision-Making, you can read how franchises are accounted for. What classification of assets does a franchise fit under on the statement of financial position?

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