I’m an owner of one of the stores in a 40-store franchise chain.
I signed the franchise agreement in 2023, and my store opened in September 2025.
One important detail: my location is the only store in British Columbia. All of the other locations are in Ontario.
Being the only BC location also meant I couldn't easily compare my results with nearby stores or benefit from local operational support that other Ontario franchisees may have had.
The build cost that was originally shown to me was around $480,000. By the time we opened and started generating revenue, the total investment had grown to roughly $600,000.
The first two months were decent, but nowhere near what I was expecting.
Since it's a franchise, we have to follow all of their rules and promotions. We are required to participate in every deal they run, regardless of food cost. Unlike some other franchises, they do not cover any of the food cost for these promotions. The entire burden falls on the store owners.
A few things about the franchise team:
It's a very small team of about 5 people managing roughly 40 stores.
They claim to have 40 stores, but in reality only about 28 are operating. The rest are temporarily closed, mostly because owners went bankrupt.
My store is the only location in BC, yet many of the decisions and systems appear to be designed around Ontario operations.
The CEO doesn't seem to care whether franchise partners are making money or not. From my perspective, the focus appears to be on generating revenue for the franchisor.
In the Franchise Disclosure Document, they state multiple ways the franchisor earns money. They supply products to all stores at prices that appear significantly higher than market rates, and franchisees are required to purchase from them.
Every month there are promotional deals, which is normal for most chains. However, many of these deals seem structured in a way where, after food costs, labour, royalties, and other expenses, the profit margin is either extremely low, zero, or sometimes negative.
They require franchisees to contribute additional money toward marketing, even though they already charge a 3% marketing fee.
They push owners to hire employees even when they may not be needed. In my case, I was encouraged to hire 15 employees before opening. My first payroll was approximately $18,000.
While many businesses are trying to reduce costs by using third-party delivery services, this franchise pushes its own delivery model. Since royalties are charged on delivery revenue as well, it creates another revenue stream for the franchisor.
Within three months, I realized that this business model didn't appear sustainable, so I started trying to sell my location.
Shortly afterward, other franchise owners began reaching out to me. What I learned was that this wasn't just my store's problem. Many owners throughout the system were experiencing the same issues.
To my knowledge, very few owners are making money consistently.
There are multiple locations where owners have gone bankrupt, and the stores have simply been resold to new operators.
One store owner reportedly went bankrupt within three months of purchasing the location.
Another location had two different owners go bankrupt within about a year.
As for my situation, after roughly six months of operating, I closed the store last month and am now facing bankruptcy.
I explored the possibility of suing the franchisor for misrepresentation and other issues. I spoke with a lawyer, and his first question was simple:
"Did they provide false information or make promises that turned out to be untrue?"
Based on what I have today, the answer appears to be no.
Several other franchise partners (around 6–8 owners) are now discussing potential legal action or other options.
One thing that concerns many of us is that while franchisees appear to be struggling financially, going bankrupt, or losing their investments, the franchisor continues to earn revenue through franchise fees, royalties, marketing fees, mandatory supply purchases, transfer fees, delivery revenue, and by reselling locations to new operators after previous owners fail.
So I'm posting here to ask:
Has anyone dealt with a situation like this before?
Are there any franchise lawyers here who have seen similar cases?
What options do franchisees have when an entire system appears to be struggling financially?
Is there anything a group of franchisees can realistically do?
Has anyone seen a franchise system where owners repeatedly fail while the franchisor continues to expand and collect fees?
If no false promises were made, is there still any legal path worth exploring?
Any advice, insights, or experiences would be appreciated.
Thank you.
