Quiznos

Quiznos

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Quiznos Overview

January 6, 2015: The Settlement Agreement entered into between the parties was approved by the court. This action has now been concluded.The court Order approving the settlement can be reviewed here

This class action lawsuit alleges that the Canadian franchisor of the Quiznos chain and others have illegally conspired to enhance and fix the prices of supplies purchased by Quiznos franchisees for their businesses. The statement of claim alleges a system of kickbacks that included Quiznos Canada Restaurant Corporation and its designated exclusive supplier, GFS Canada Inc.The action is based on law that includes the Competition Act, a federal statute that prohibits price maintenance and conspiracies to maintain prices. Under this law, it is illegal to force or coerce a distributor (for example) to fix or enhance the prices at which it sells goods or to set a minimum resale price.

This action alleges that the defendants violated the Competition Act essentially by inflating prices on supplies and raw materials purchased by the franchisees for their businesses.  According to the allegations, Quiznos received a portion of the enhanced price which the distributor sold to the franchisees. The plaintiffs complain that the prices for these suppliers were above what is commercially reasonable-and therefore in further violation of laws that protect franchisees.

The plaintiffs seek a money award that represents the harm that the class members suffered and an award of punitive damages designed to punish the defendants.

In March 2008, a motion judge declined to certify the proceeding as a class action. He held that there were certain issues which were not common to the entire class, specifically the amount of damages suffered by each franchisee as a result of the alleged price-fixing scheme.  However, this decision was appealed to the Divisional Court which in April 2009 overturned the motion judge and held that the class action should be certified.  This decision was unanimously upheld on further appeal by the Ontario Court of Appeal. Leave to appeal to the Supreme Court of Canada was dismissed.

Quiznos Updates

January 6, 2015: The Settlement Agreement entered into between the parties was approved by the court. This action has now been concluded.The court Order approving the settlement can be reviewed here

  • December 30, 2014: The parties have entered into a revised settlement agreement and will present the agreement to the Court of Appeal on January 6, 2015 at 10:00am, in Courtroom 5, at Osgoode Hall, 130 Queen St. W., Toronto, Ontario. You can review the agreement here. Quizno’s Canada Settlement Agreement
    A redline comparison showing revisions from the previous agreement can be found here. Quizno’s Settlement Agreement ComparisonJustice Perell’s reasons addressing the previous settlement agreement can be found here.

Class members may attend the approval hearing and speak to the court. Any comments in writing should be sent via email by January 5, 2015 to smurphy@sotosllp.com.

  • October 2, 2014: The  court declined to approve the proposed Settlement Agreement.
    You can review the court’s reasons here.Details of any future settlement proposal will be posted on this website. Please check back in the future for updates.
  • July 11, 2014: In March of this year, various entities that make up Quiznos filed for bankruptcy protection in the United States. Given Quiznos’ Canadian structure and the US bankruptcy, any judgment which might be obtained against Canadian Quiznos in this action was likely to be hollow. After careful consideration, the representative plaintiffs decided that the prospects of collection did not warrant the out-of-pocket expenses needed to see the case through to trial and we agreed with this assessment.A tentative settlement has been negotiated which would see Quiznos reimburse $275,000 for out-of-pocket expenditures which have been incurred on behalf of the class members to date.The tentative settlement agreement requires court approval.  The parties will appear in court on October 2, 2014, to ask the court to approve the settlement agreement.  If you are a class member, please review the Notice to Class Members, which summarizes the terms of the Settlement Agreement and the ways class members can provide comments or oppose the settlement:
  • October 22, 2013: Quiznos and GFS have brought summary judgment motions to have this action dismissed before trial. These motions will be heard over the course of a week starting on July 3, 2014. Class counsel will be opposing these motions. In response to Quiznos and GFS, the court will be provided with evidence from former Quiznos franchisees and various food industry experts. If the summary judgment motions are dismissed, the action will proceed to trial. 
  • January 3, 2012: On December 19 and 20, 2011, all parties engaged in voluntary judicial mediation in Toronto to explore the possibility of settlement. Class counsel, the class representatives and a representative for current Quiznos franchisees met with GFS and Quiznos representatives and attempted to broker a deal that would suit all parties. Ultimately, a settlement agreement could not be reached. The case is currently proceeding toward trial.
  • October 19, 2011: A mediation of this lawsuit will take place on December 19 and 20, 2011.  Mediation is a voluntary process aimed at facilitating a settlement of a lawsuit.  The mediation will be conducted by a judge of the Superior Court of Justice. We will inform all class members of the outcome of the mediation after it is concluded.
  • April 27, 2009: On appeal, the Ontario Divisional Court overturned the motion judge and held that the class action should be certified.  This decision was unanimously upheld on further appeal by the Ontario Court of Appeal. Leave to appeal to the Supreme Court of Canada was dismissed.
  • March 4, 2008: A motions judge of the Ontario Superior Court of Justice declined to certify the proceeding as a class action. He held that there were certain issues which were not common to the entire class, specifically the amount of damages suffered by each franchisee as a result of the alleged price-fixing scheme.

Quiznos News

Allan Dick featured in ROB article
Sotos partner Allan Dick is quoted in an April 4 article in The Report on Business section of the Globe and Mail. The piece covers the US bankruptcy filing of the parent company of Quiznos. Quiznos Canada is a separate entity, and Allan discusses possibly implicating of the US filing on a class action suit against the Canadian operation by some 600 current and former franchise operators.
2018-06-14 17:44:56

Quiznos' Appeal to Supreme Court Dismissed
The Supreme Court of Canada has dismissed Quiznos Canada Restaurant Corporation and GFS Canada Inc.'s application for leave to appeal in the ongoing class action lawsuit between Quiznos franchisees and their master franchisor.
2018-05-15 17:42:54

Quiznos victory featured in Lawyers Weekly
The July 9, 2010 issue of Lawyers Weekly features a front-page article about Quizno's Canada Restaurant Corp. et al. v. 2038724 Ontario Ltd.
2018-05-15 16:37:50

Court of Appeal Confirms Quiznos Certification
Quiznos franchisees represented by Sotos LLP will be allowed to proceed as a class in their lawsuit against Quiznos Canada and Gordon Food Services
2018-05-16 09:56:39

FP: Franchise Class Actions on the Rise
The Financial Post recently featured Sotos LLP and interviewed David Sterns in an article on franchise class actions.
2018-05-11 14:15:14

Frequently Asked Questions

A class action is a special form of lawsuit in which one plaintiff brings a claim against one or more defendants based on allegations which are common to a group, or class, of people. In order for the action to become a class action, it must proceed through a stage known as “certification”.

A statement of claim is issued on behalf of a “representative plaintiff”. The representative plaintiff’s role is to work with class counsel to bring the action forward and to represent the class members in court.

In order for an action to proceed on behalf of the entire class, a judge must decide (among other things) whether the members of the proposed class have common issues, and whether a class action is the preferred way to resolve the issues. The process to decide these issues is known as the “certification motion”. If the judge is satisfied that the case meets all of the requirements for certification, he or she will issue an order which certifies the action as a class action.

No. If the lawsuit is certified, and you are included in the class as defined, you are automatically included in the lawsuit.

No. We will work primarily with the class representative.

Those who do not wish to remain in the class will be given the option to opt-out by sending an opt-out form at the appropriate time to us.

Certification as a class action will enable us to prove the facts in a single lawsuit rather than in numerous individual lawsuits. This has obvious benefits to the class members and to the courts.

There is no timeframe. We will move the case forward diligently but it can take a considerable period of time to reach trial.

Many class actions settle and thereby remove the need for a trial. However, we cannot predict with any certainty whether or not there will be a settlement in a given action.

The chances of “winning” can never be accurately predicted.

Class action lawsuits are typically brought on a contingency fee basis. This means that the lawyers will only be paid if the action is successful at trial or results in a settlement in favour of the plaintiffs. Legal fees would then be paid out of the settlement or judgment proceeds as approved by a judge.

Disbursements (i.e. out-of-pocket expenses, including expert reports) may be dealt with in one of two ways.

Most commonly, the lawyers will absorb the cost of disbursements. The lawyers may seek funding assistance from the Class Proceeding Fund, which may provide funding for disbursements if granted.

In some cases, disbursements may be funded by the class members, including the class representative. This typically occurs in smaller class actions brought on behalf of an organization or network of individuals where each member of the class is easily identifiable and known to the representative plaintiff. If the class action is successful, amounts advanced for disbursements are re-paid from the proceeds of any judgment or settlement to class members (and others).

Only the class representative may be liable for costs of the common issues portion of the action if it is unsuccessful.

A “payout” or an award for damages is never certain.

The action may settle or it may proceed to trial, at which time a judge will determine the amount of damages, if any, to which the class members are entitled to. Regardless, the amount of “payout” cannot be predicted, and we cannot predict when the action may settle or when the trial will conclude.

If the lawsuit is certified as a class action, you will receive a formal notice from the court explaining the nature of the case and providing you with the opportunity to opt out if you wish. General information about the lawsuit will be posted on Sotos LLP’s website at https://www.sotosclassactions.com.

We ask that you keep a copy of any documents, correspondences, records, invoices, receipts, etc. that you feel might be relevant to your individual claim in the class action. If there is a “payout,” this documentation may be required in order to support your claim for compensation.

It is not required that you send any documents to us at this time.

This Class Action is Closed

This class action is closed.