The owner of one Toronto restaurant location was shocked to find himself locked out of his business after his parent company quietly handed it over to someone new, he claims.
For the past 13 years, Allen, a Toronto resident and owner of three different sushi restaurants in the city, has proudly owned and operated the Sushi Shop location in Union Station, but, he tells blogTO, it all came crashing down earlier this week.
“[On the morning of March 18,] I arrived at my store as I had done every day for 13 years, but this time I wasn’t allowed in,” Allen claims. “The locks had been changed. My business, my livelihood, my existence had been taken from me overnight.”
Allen tells blogTO that he was ultimately “blindsided” to show up for work and find that MTY, the parent company of Sushi Shop and a number of other quick-service food companies in Canada, had, apparently without his knowledge, sold the franchise to a new owner, who would be taking over the restaurant immediately.
According to Allen, a fellow franchise owner in the area spoke to MTY’s head offices to gain insight on what was going on, and was told that the shop would be reopening under new ownership as early as Friday, March 21
As suddenly as Allen found himself locked out of the restaurant, though, he does tell blogTO that he believes the company had been laying the groundwork to kick him out of the franchise for some time.
“The way everything unfolded, how they systematically made things difficult for me, created unnecessary obstacles, and then suddenly locked me out overnight, makes it clear that this wasn’t a last-minute decision,” he tells blogTO, adding, “They didn’t shut down the business, they just wanted to remove me from it.”
According to Law Works, a boutique law firm with offices in Ontario, Alberta and British Columbia, franchisors do have the ability to terminate franchise agreements (thus removing the franchise owner from the business) if any terms laid out in said agreement are violated.
Such agreements also frequently include the right of the franchisor to buy out the location or take over the lease.
Anything from insolvency to failure to pay franchise fees can provide legal backing for a franchisor to kick their franchisee out, but Allen claims he wasn’t presented with any valid reasons for his forced removal.
“They sent a lawyer’s letter filled with vague and baseless claims, but none of them justified an overnight takeover,” he tells blogTO.
In hindsight, Allen tells blogTO that he believes MTY was building a case to push him out of the location prior to the shutout, using new policies and “unreasonable” requests to do so.
“Slowly but surely, they began creating obstacles, setting impossible expectations, making last-minute demands, and interfering with daily operations,” he tells blogTO. “They pressured me with unreasonable requests, changed policies without notice, and made it clear they were looking for any excuse to push me out.”
“For months, I felt like I was fighting an uphill battle. Every time I tried to comply, they moved the goalpost.”
Ultimately, despite possible signs that pointed to future trouble, Allen tells blogTO that he was “blindsided” by the move.
“There was no formal notice telling me that they were going to take over my store or anything near it,” Allen claims.
“If they had been transparent about their intentions, I would have fought back sooner or done anything to prevent it for sure. Instead, they waited until the moment that suited them best and then locked me out overnight.”
At the time of publication, neither Sushi Shop nor MTY, its parent company, have responded to blogTO’s request for comment on this story or substantiated Allen’s claims.
