Court refuses to certify Quizno’s franchisees as a class

A group of franchisees from Quizno’s sued the franchisor for overcharging them for products. All franchisees were required to buy goods from a third party (also a party in the lawsuit) at prices set by them. Because of the costs associated with litigating the case, the individual franchisees wanted to become certified as a class under the Class Proceedings Act, 1992 of Ontario. Class proceedings legislation benefits the franchisees because it would allow them to share the costs of litigation which, in many cases, might be the only way they could access the court system. Unfortunately for the franchisees in this case, they did not meet the test for certification since their damages could not be assessed globally, but only individually.

But let’s not focus on the negative. What is positive about this case is that the court suggested that when parties contract out of using class proceedings legislation in the franchise agreement (as was the case here), these provisions may not be enforceable. Although there may be cases where such contracting out provisions are valid, they were not held to be enforceable in this case. 

The case is 2038724 Ontario Ltd. et al. v. Quizno’s-Canada Restaurant Corp. et al. If you’re curious, check out the Statement of Claim.