What have they told you so far? MOORE: Other than they’re coming in to shut down, nothing. So it was through a form of a letter.
CBC-FM Sudbury
December 7, 2001
Country Style Donut Shops
CBC Radio broadcast transcript
DAN LESSARD: The next time you eat a quick fix of coffee and/or donuts, you can forget about visiting some of the Country Style Donut stops in the North East. The company is closing down some of its locations. Some have already been shut down, including stores in North Bay, Sault Ste. Marie, Sudbury Valley East in Chelmsford, one Sudbury location on Highway 17, The Kingsway was supposed to close earlier this week but the owners have been granted a three day reprieve. The Points North contributing journalist, Anastasia Rioux, spoke with owner, Norma Moore, after she received the news. Anastasia started by asking why the store was closing in the first place.
NORMA MOORE: Country Style Donuts Store Owner: There is no communications with Head Office. We’re not absolutely sure why, but we do know that there is a lot of franchisees in the same situation as us. We’re just presently waiting and finding out what the situation is.
ANASTASIA RIOUX: What have they told you so far?
MOORE: Other than they’re coming in to shut down, nothing. So it was through a form of a letter.
RIOUX: And what did that letter say?
MOORE: If you needed any information or call, to call this certain number which we have, but they have not responded back. So we had tried to respond by letters hoping that they would answer them, which they haven’t at the moment.
RIOUX: So how long ago did you find out that they were planning on coming in and shutting the store down?
MOORE: Approximately a week. That’s all the notice they gave us was a week, which is not enough to even notify your employees. Legally you’re supposed to give your employees two weeks notice, and that puts us on the spot.
RIOUX: So what have you told your employees so far?
MOORE: Well they know that we’re trying to do everything that we can to try and keep this operation and keep their jobs for them. The employees are very upset. Last night we arrived very late at the store to find our graveyard shift employee was in tears to find out that perhaps we would be closed today. Luckily we are able to reassure her that we do have a three day delay, which they’re perhaps going to work us now, and maybe we can do something now and try and still operate.
RIOUX: What do you want to get out of this? What is the plan after three days?
MOORE: To take over the lease ourselves independently. We’re actually a sub-lease, and if we can take over the lease, then we can operate on our own.
RIOUX: And what do you mean by a sub-lease?
MOORE: Well Head Office doesn’t actually own the building, they also lease it from another developer, so we would like to by-pass Head Office and lease directly from the developer.
RIOUX: And just under your own name?
MOORE: Sure, we haven’t come up with a name, but we can make it any name, sure.
RIOUX: Just how well is your store doing financially, because I mean maybe that’s part of the problem? I don’t know.
MOORE: Well I believe it could probably be a bit of the problem and that’s the same as every situation with the franchisees. There comes a time when you realize that operating costs are inflating and – food costs is what I mean is operating costs. We try and keep it to a minimal, but as Head Office keeps increasing and increasing their prices to us, we’re not going to increase our coffee prices and everything, so we’re taking a loss, a very substantial loss.
RIOUX: How long have you owned the franchise?
MOORE: About a year and three months. So we definitely have to kind of re-negotiate. We have to work it out.
RIOUX: Was it bad right from the onset?
MOORE: Yes. We’ve had problems from the beginning. Certain promises that were given to us have to been abided right from the day one.
RIOUS: Give me an example of promises.
MOORE: Well we were promised that in our deal that all common area, which is such as garbage and snow plowing and everything, would be included in our deal, which it hasn’t been. We’ve had to pay for it ourselves. We were supposed to also have this building as a warrantee for one year, and certain things have been happening on the property and they won’t cover those costs and we had to do it ourselves.
RIOUX: Okay now after three days, if they do come in here and they close everything up, you still are paying the rent, you still technically own the building?
MOORE: Technically if they come in and close us up no, because we’re getting ride of the lease with them. They have to continue making the payments to the developer, we won’t have to. But we do have other financial obligations. We put our life savings into it and we’ve also had to acquire a loan through the bank, and we have to meet those payments to the bank still. So if we’re down in three days, well it could be nasty.
RIOUX: So I mean if that does happen, what are you going to do? Do you have a backup plan?
MOORE: No, we’re going day by day at the moment. There’s absolutely no words to describe how I’m feeling right now. It’s a combination of all emotions.
LESSARD: That is Norma Moore. Her and husband Don own the Country Style Donuts store on the Kingsway in Sudbury. That store is expected to close this weekend. Another store in the Sault and Sudbury are also on the chopping block. We tried to get comments from a Country Style Donuts. Country Style President, Pat Gibbons, declined our request for an interview. In an e-mail statement, he told CBC radio that Country Style is reviewing its operations. He says several stores across Canada are behind in their payments and were told to bring their accounts up-to-date. When they didn’t comply, the franchise agreements were terminated.
Brought to you by WikidFranchise.org
Risks: Uncharacteristically shy with media requests, Termination of franchisee, mass, Private Members’ Bill, Rent increase, Gouging on supplies, Lease controlled by franchisor, Life savings gone, Anticipatory grieving, Intentional franchisor insolvency, Franchisees more willing to speak up, Canadian Broadcasting Corporation, CBC, Must buy only through franchisor, Must lease, not buy, land and/or building, Terminated by form letter, Why franchisors sublease to franchisees, Franchisor not returning franchisee’s calls, Canada, 20011207 CSD Radio
