IN THE UNITED STATES DISTRICT COURT FOR

THE DISTRICT OF MINNESOTA

TIM-MINN, INC., a Minnesota 

Corporation,

 Plaintiff,

 v.

TIM HORTONS USA, INC. and 

RESTAURANT BRANDS 

INTERNATIONAL, LIMITED 

PARTNERSHIP

 Defendants.

Civil No.:

COMPLAINT

Plaintiff, Tim-Minn, Inc., (hereinafter “Tim-Minn” or “Plaintiff”) and by and through its 

attorneys, brings this action against Defendants, Tim Hortons, Inc., and Restaurant Brands 

International, Limited Partnership, (collectively, “Defendants”). Plaintiff states and alleges the 

following based upon information and belief after due investigation by the undersigned counsel 

and the personal knowledge of the Plaintiff.

NATURE OF THE ACTION

1. Plaintiff brings this action to address and find relief from the false and misleading 

practices and omissions used by Defendants in connection with the sale of the Area Representative

and Development Agreement (“ARDA”) and Franchise Agreement(s) which they entered into with 

Defendant Tim Hortons USA, Inc. (“THUSA”). In addition, Plaintiff brings this action to address 

serious, material breaches of its agreements with THUSA and its parent, Defendant Restaurant 

Brands International, Limited Partnership (“RBI”) which have caused, and continue to cause, 

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Plaintiff significant financial and other losses which imperil its ability to operate its businesses on 

an ongoing basis.

2. In particular, Plaintiff alleges THUSA provided false and/or misleading financial 

representations to Tim-Minn outside of the confines of their Franchise Disclosure Document 

(“FDD”), which were materially different from the financials provided to the State of Minnesota, 

Commerce Department, in connection with the registration of that FDD under the Minnesota 

Franchise Act (“MFA”) Minn. Stat. § 80C.01 et seq. Plaintiff further alleges the FDD Tim Hortons 

provided to Tim-Minn was missing the complete Item 19 disclosures which were registered with 

the Commerce Department. Critically, THUSA never obtained an executed Item 23 reciept from 

Plaintiff at the time of disclosure, and did not request an executed Item 23 receipt until early 

September, 2015, weeks after THUSA’s agent originally disclosed to Plaintiff the adulterated FDD 

and, importantly, weeks after Plaintiff’s agent had executed an NDA in THUSA’s favor and the 

parties were actively working together on their business relationship in violation of Minnesosate 

and Federal law.

3. These false and/or misleading financial representations were used to induce 

Plaintiff into agreeing to develop THUSA’s business in the State of Minnesota, a wholly new 

market for the Tim Hortons franchise system and under which Plaintiff would serve as an area 

developer and franchisee with responsibility for building out the territory from zero to more than 

280 stores.

4. However, and as will be pled in detail elsewhere herein, THUSA’s financial 

representations were not only violative of the MFA, but also had little to no bearing on the actual 

Minnesota market, such that Plaintiff’s due diligence, which almost totally relied upon the data 

provided by THUSA, was fundamentally undermined.

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5. Losing money and working to maintain a crushing development schedule, Plaintiff 

and THUSA, along with its corporate parent, Restaurant Brands International, LP (“RBI”), entered 

negotiations to amend their master agreement. In so doing, THUSA again violated the MFA by 

including a “General Release” in the amended contract which purported to waive numerous rights 

and claims Plaintiff was entitled to under the MFA. This release was little more than an attempt 

to inoculate THUSA from any claims Plaintiff might have under the original agreement and

therefore is void and unenforceable.

6. Plaintiff further alleges THUSA completed these transactions with the full 

knowledge and, importantly, the assistance of its corporate parent, Defendant Restaurant Brands 

International, LP (“RBI”).

7. The false and/or misleading financial representations provided to Plaintiff by 

Defendants caused Plaintiff to invest a substantial amount of money, time, and effort into building 

out the Tim Hortons1 Restaurants brand in Minnesota, but the anticipated income from the venture 

– as represented by THUSA’s financial disclosures, never materialized because those numbers 

were flawed, incomplete, and lacked crucial variables.

8. In addition to the foregoing, Plaintiff alleges that THUSA misrepresented material 

facts about its system in its FDD in furtherance of a scheme to purchase and operate franchises, 

and pay franchise-related fees. THUSA exploited its control and overweening economic power in 

order to extract exorbitant and unjustifiable payments from Tim-Minn. As a result, THUSA has 

reaped (and continues to reap) inflated sales and profits while causing substantial, financial harm 

to Plaintiff.

 

1 For the Court’s convenience, the term “Tim Hortons” shall refer to the franchise system owned by Defendants, and 

not Defendant THUSA.

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9. To execute this scheme, THUSA preyed upon an inexperienced franchisee 

interested in partnering with Tim Hortons to bring quality coffee and baked goods products to an 

as-yet-untapped market. Tim-Minn has no prior experience in franchising or restaurant 

management whatsoever. THUSA used knowingly deceptive statements in its FDD in order to 

obtain Plaintiff’s trust and confidence in a fraudulent effort to build its brand in the United States 

and implement its scheme.

10. This matter is about broken promises, unfulfilled contractual expectations and false 

and misleading statements and omissions. Tim-Minn invested millions of dollars in bringing the 

Tim Hortons brand to Minnesota, only to learn too late that THUSA had employed misleading, 

unlawful financial representations to induce its efforts in this State. This lawsuit addresses a 

flawed and deceptive economic model manipulated by those in control of the franchise system for 

their own self-serving gain.

11. The Core of this problem is the FDD provided to Plaintiff in 2015: in its Item 8 

disclosures, THUSA advised:

...you must purchase or lease all products, fixtures, furnishings, building 

components, equipment, décor, signs, Paper goods, containers, cartons, packaging, 

supplies, and smallwares and other utensils, services, including project 

management services, product ingredients, insurance and other items installed in 

used, or sold by the Shop (“Items”) solely from suppliers who have been approved 

by us and all these Items must meet our specifications. We can designate ourselves, 

our affiliates, or a third party as the sole supplier for any Item. ... We and our 

affiliates may charge what we consider to be a reasonable mark-up (emphasis 

added) on items sold to you.

12. What THUSA did not disclose, and what Plaintiff could not have known at that 

time, was that THUSA was engaged in a predatory practice whereby it charged objectively 

unreasonable markups on dozens – if not hundreds – of necessary items.

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13. THUSA uses mandatory supply relationships it imposed upon Plaintiff (and all its 

franchisees, for that matter) to extract supra-competitive profits from Plaintiff, altogether ignoring 

its legal obligation to limit those markups to a “reasonable” amount. This lie, along with other 

false financial representations detailed elsewhere herein, has damaged Plaintiff and undermined 

its ability to operate its restaurants and territory profitably while simultaneously lining THUSA’s 

pockets. 

14. In their effort to bilk Plaintiff, THUSA exploits its information advantage in the 

market for the “Items” covered in the disclosure above, and as set forth in the Franchise 

Agreement(s). Through this overwhelming power and control, THUSA has exclusive control over 

not just what Tim-Minn purchase, but also how much it costs Tim-Minn. THUSA has exclusive 

right to compel Plaintiff’s purchase of an estimated 100% of its purchases in order to:

a. Purchase needed goods and services in quantities far greater than 

those necessary to meet its operational need; 

b. Force franchisees and developers like Tim-Minn and its subsidiary 

entities to accept so-called “Drop Shipments” which are unasked for 

products ordered by THUSA and dropped off for new product 

launches and limited time offers (“LTOs”) and 

franchisees/developers are given no choice but to pay for these 

products; and

c. Work with THUSA-mandated distributors and pay those 

distributors excessive prices for goods and services substantially 

exceeding what Plaintiff would pay in arm’s length transactions due 

to the altogether unnecessary and entirely unreasonable markups 

and fees for the alleged “wholesaling” done by the THUSAcontrolled providers.

15. THUSA makes money in two ways: by selling franchises and collecting recurring 

fees from those franchisees in the form of royalties and other fees, and by selling required Items 

to franchisees at a markup. It is this second manner of producing income which is so egregious, 

because by any objective metric, THUSA’s markups are unreasonable and predatory. More, the 

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predatory and unreasonable markups on these Items were not only not disclosed by THUSA prior 

to Tim-Minn’s entry into the system, they establish that THUSA’s statements were false and 

misleading as contained in the FDD. Moreover, it is entirely inconsistent with THUSA’s promise 

to keep these markups “reasonable.”

16. Finally, Plaintiff alleges THUSA failed to perform its obligations under the parties’ 

contracts, hampered Plaintiff’s ability to locate and secure additional restaurant sites, and has 

forced Plaintiff into a position wherein it is in danger of breaching its area development 

responsibilities to THUSA and RBI through no fault of its own.

17. To redress these issues, Plaintiff alleges, therefore, that Defendants violated the 

FTC’s Franchise Rule (16 CFR § 436), the Minnesota Franchise Act, and the common law of the 

State of Minnesota. Plaintiff seeks monetary damages, attorney’s fees and costs, and all other such 

relief as the Court may deem equitable and just under the circumstances.

JURISDICTION AND VENUE

18. This Court has jurisdiction over the parties and subject matter in this civil action 

pursuant to 28 U.S.C. § 1332(a) in that the parties are citizens of different states and the matter in 

controversy exceeds the sum of $75,000.00, exclusive of interest and costs. The Court has 

supplemental jurisdiction over Plaintiff’s state law claims pursuant to 28 U.S.C. § 1367.

19. Further, Defendants are subject to the long arm jurisdiction of this Court pursuant 

to inter alia, Minn. Stat. § 80C.21 and Minn. Stat. § 543.19 because Defendants operated, 

conducted, engaged in, and/or carried on a business or business venture within the State of 

Minnesota; committed an act within the State of Minnesota which caused injury to Plaintiff; and/or 

committed an act outside the State of Minnesota which caused injury to Plaintiff within the State 

of Minnesota, the nature of which Minnesota has an interest in. Namely, the Defendants operate 

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and operated the Tim Hortons franchise system and made the complained-of false and misleading 

financial representations to Plaintiff concerning a franchise to be operated in Minnesota.

20. Venue is appropriate in this Court pursuant to 28 U.S.C. § 1391(b)(2) and Minn. 

Stat. § 542.01 and 542.09 because Defendants are foreign entities who conduct business in 

Minnesota and Plaintiff’s principal place of business is in Minnesota, it conducts business almost 

totally within the jurisdiction of this Court, and the events which give rise to this action are focused 

upon the State of Minnesota. Defendants maintain continuous and systematic contacts with the 

forum State, including but not limited to the efforts of Stephen Goldstein, who at all times relevant 

hereto acted as THUSA and RBI’s agent and representative in Minnesota, such that his conduct is 

attributable to Defendants. Additionally, Plaintiff reasonably believes the choice of venue is not 

a substantial prejudice upon any Defendant.

21. For the sake of transparency, the ARDA contains a forum selection and choice of 

law provision favoring the state and federal district courts of the State of Florida and Florida law. 

Plaintiff reasonably believes that, pursuant to Minn. Stat. §80C.21, such provisions are void and 

unenforceable under the stated public policy and laws of the State of Minnesota.

PARTIES

22. Plaintiff, Tim-Minn, is an incorporated entity organized under the laws of the State 

of Minnesota with a principal place of business at with a principal place of 5001 American 

Boulevard West, Unit 1040, Bloomington, Hennepin County, Minnesota.Tim-Minn is wholly 

owned by Restaurant Development Partners, Corp. (“RDP”), an Ontario, Canada based entity.

23. Before entering into a business relationship with THUSA to build out and create a 

market for Tim Hortons in Minnesota, RDP has no prior experience whatsoever in franchising or 

the restaurant industry on a retail level; it is a property developer and builder in Canada.

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24. Defendant, THUSA, is a Delaware incorporated entity with a principal place of 

business located at 5505 Blue Lagoon Drive, Miami, Florida 33126. THUSA is the franchisor of 

the Tim Hortons quick-service franchise restaurant system. 

25. Defendant, RBI, is a foreign entity with corporate offices and U.S. headquarters in 

Miami, Florida, located at 5505 Blue Lagoon Drive, Miami, Florida 33126. RBI is the parent 

company of Tim Hortons. RBI’s portfolio also includes the Burger King and Popeye’s Louisiana 

Kitchen franchise systems. RBI was created in 2014 when Burger King merged with Tim Hortons.

Upon information and belief, RBI operates in the U.S. through a wholly-owned subsidiary, 

Restaurant Brands International US Services, LLC, a Florida limited liability company with its 

principal place of business located at 5505 Blue Lagoon Drive, Miami, Florida 33126.

BACKGROUND FACTS

A. Tim Hortons’ Franchise Disclosure Document is Governed by the FTC 

Franchise Rule

26. The Federal Trade Commission has promulgated certain laws requiring the delivery 

to prospective franchisees of a prescribed disclosure document, previously called a UFOC and 

now a FDD, concerning the franchisor, its management, and the material terms and conditions of 

the franchise agreement, among other things, prior to the execution of any agreement by a 

prospective franchisee. This was known as the Franchise Rule, and the Amended Franchise Rule 

became effective as of July 1, 2007. The UFOC was, and the FDD is now, a disclosure format 

accepted by the FTC for conveying such information to prospective franchisees.

27. The Franchise Rule requires a franchisor to provide prospective franchisees with 

disclosures that are “accurately, clearly, and concisely stated.” 16 C.F.R. § 436.l (a). Moreover, 

“it is an unfair and deceptive act” for any franchisor to violate a provision of the Franchise Rule. 

16 C.F.R. § 436.1.

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28. The Franchise Rule holds that “it is an unfair and deceptive act or practice...for any 

franchisor” to violate a provision of the Franchise Rule. 16 C.F.R. § 436.1; 15 U.S.C. § 57a (d) 

(3). Furthermore, the MFA, and the rules promulgated thereunder, provide that violations of the 

rules promulgated under the Federal Trade Commission Act are violations of Minnesota law. 

29. Moreover, under the MFA, unfair and deceptive practices by franchisors with 

respect to the sale of franchises covered by the Act are prohibited. See e.g., Minn. Admin. Rules

2860.3500, 2860.4400, 2860.4500.

30. THUSA has violated federal regulations and Minnesota law insofar as it has 

engaged in deceptive and unfair practices with respect to the disclosures made in its FDD to 

Plaintiff, as well as other conduct to be detailed below. 

B. The Tim Hortons Story

31. Tim Hortons is a well-known quick service coffee shop and bakery in Canada and 

has, over the past several years, made significant inroads into various northern-US markets.

32. The Tim Hortons brand was developed in the 1960s by former NHL player Miles 

G. “Tim” Horton with the assistance of his partner, Ron Joyce.

33. By 2000, there were two thousand (2,000) “Tim Hortons” cafes in the United States 

and Canada.

34. In 2014, Tim Hortons merged with Burger King and formed Restaurant Brands, 

International Limited Partnership, with both franchisors operating under RBI’s umbrella. As part 

of the impetus for the merger, Tim Hortons desired to leverage Burger King’s resources for further, 

international expansion among other needs.

35. THUSA is responsible for managing and conducting Tim Hortons’ United Statesbased franchising.

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FACTS GENERALLY APPLICABLE TO ALL COUNTS

A. The Initiation of the Business Relationship Between Tim-Minn and THUSA

36. On July 23, 2015, Mark Holly (a former employee of Tim Hortons) connected Paul 

Durigon (“Durigon”), Tim-Minn’s principal, with Stephen J. Goldstein (“Goldstein”), former Vice 

President of U.S. Development for THUSA via email. A true and correct copy of this email chain 

is annexed hereto as Exhibit A.

37. At the time Goldstein and Durigon were introduced, Tim-Minn did not yet exist, 

and was merely a contemplated entity should talks progress further.

38. Goldstein and Durigon mutually expressed interest in working together on 

expanding Tim Hortons in the United States. See, Exhibit A.

39. Durigon is also part of the ownership of a Canadian construction company which 

participated in the construction of several Tim Hortsons restaurants across Canada and serves as a 

landlord for a few Canadian Tim Hortons franchisees and was familiar with the brand. 

40. Durigon was not a sophisticated purchaser of either franchises or area development 

agreements and originally sought a “partnership” with THUSA, as evidenced throughout several 

of the parties’ emails. (as attached hereto)

41. On July 27, 2015, Durigon executed a non-disclosure agreement (“NDA”) drafted 

by THUSA. A true and correct copy of this NDA is annexed hereto as Exhibit B.

42. The following day, Durigon traveled to Tim Horton’s corporate headquarters in 

Oakville, Ontario to meet with Goldstein regarding opportunities in the United States.

B. Goldstein and Durigon Begin Negotiating Terms for The First ARDA

43. On August 3, 2015, and subject to the NDA, Goldstein sent five, identical emails 

to Durigon, attaching what was represented to be THUSA’s then-current FDD (dated May 2015), 

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as well as several, additional documents2, namely:

a. A “pitch book;”

b. Renderings of two of the restaurant models;

c. A combined master Excel spreadsheet called a “Data Pack;”

d. A series of illustrative development maps entitled “Tim Hortons 

USA_MinneapolisOpportunity;”

e. A rationale behind THUSA’s increased pricing; and

f. RBI’s most recent quarterly presentation (earnings releases).

44. A true and correct copy of Goldstein’s August 3, 2015 email is annexed hereto as 

Exhibit C.

45. Notably, the FDD provided by Goldstein, acting as THUSA’s agent, was missing 

several pages. More specifically, pages 52-68 of the FDD were blank and page 51 was blurred so 

significantly as to be totally obscured. The affected pages effectively scrubbed the Item 19 

disclosures from the FDD. A true and correct copy of the May 2015 FDD provided to Durigon by 

Goldstein on behalf of THUSA is annexed hereto as Exhibit D.

46. Conversely, the May 2015 FDD registered with the Minnesota Commerce 

Department, as required by the Minnesota Franchise Act, Minn. Stat. § 80C.02., is complete and 

pages 52-68 are intact and present and page 51 is clear and legible. This document was not

provided to Tim-Minn. A true and correct copy of the May 2015 FDD registered with the 

Minnesota Commerce Department and downloaded from the CARDS search portal is annexed 

hereto as Exhibit E.

 

2 These documents are protected by the parties’ NDA.

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47. Also on August 3, 2015, in a separate email chain, Goldstein presented three, 

available U.S. markets for Durigon’s consideration: Minneapolis, Michigan, or Cleveland. A true 

and correct copy of this email correspondence is annexed hereto as Exhibit F.

48. Durigon requested more information on the Michigan territory and was informed 

by Goldstein that THUSA’s counsel needed to provide input and guidance on what type and the 

amount of information THUSA could reasonably provide. See Exhibit F.

49. On August 12, 2015, Durigon and Goldstein met to discuss the potential deal in 

broad terms.

50. Roughly two weeks later, in emails exchanged between August 23, 2015 and 

August 24, 2015, Durigon and Goldstein discussed certain parameters of the deal from each side’s 

perspective. A true and correct copy of this email correspondence is annexed hereto as Exhibit G.

51. Included in that correspondence were Durigon’s notes on areas to explore as part 

of the deal. A true and correct copy of this document is annexed hereto as Exhibit H.

52. On August 26, 2015, Durigon and Goldstein met to discuss Durigon’s notes.

Thereafter, on August 28, 2015, Durigon received the first draft of the ARDA from Tim Brinkley, 

Vice President & Associate General Counsel for THUSA. A true and correct copy of this 

correspondence is annexed hereto as Exhibit I.

53. Brinkley’s email also references an Exclusivity Agreement, which had been 

requested by Durigon. At that time, the document was contemplated but not yet available. See

Ex. I.

54. The following day, and thereafter until August 31, 2015, Goldstein and Durigon 

corresponded regarding the ARDA and putting together a dinner meeting which would also include 

Elias Diaz (“Diaz”), then-president of Tim Hortons. In particular, Goldstein desired to know 

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which Tim Hortons employees and/or officers Durigon was targeting to bring into his proposed 

venture. A true and correct copy of these email exchanges is annexed hereto as Exhibit J.

55. On September 3, 2015, Durigon transmitted initial redlines back to THUSA, crafted 

by Durigon’s attorney, Lawrence P. Swistak (“Swistak”). A true and correct copy of this email 

chain is annexed hereto as Exhibit K.

56. By way of reply email, Goldstein remarked for the first time that THUSA had not 

received a signed copy of the FDD’s Item 23 receipt as required by the FTC and Minnesota law. 

See Exhibit K.

57. On September 6, 2015, Durigon transmitted his own redlines for the ARDA to 

Goldstein. In the transmitting email, Durigon addressed several issues relating to the burgeoning 

business relationship with THUSA, including his desire to be partners in the endeavor moving 

forward. A true and correct copy of this correspondence is annexed hereto as Exhibit L.

58. On September 8, 2015, Goldstein requested a teleconference to discuss Durigon 

and Swistak’s redlines. A true and correct copy of this email correspondence is annexed hereto as 

Exhibit M.

59. On September 9, 2015, Durigon and Goldstein spoke via telephone, with Swistak 

on the line, to go over the two sets of redlines sent to THUSA.

60. That same day, Goldstein sent an Excel spreadsheet referenced as a “high level 

equity investment requirement for capex.3” See Ex. M.

61. Goldstein further noted in his email that “we have you building the full schedule 

for the first year and the majority for the second year. We also put in 1mm4of minimum cash in 

the assumptions to highlight the total equity need without cash flow generation.” Id.

 

3 Capital Expenditures

4 $1 million

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62. On September 10, 2015, Durigon, Goldstein, Diaz, David Blackemore 

(“Blackore”), former President of THUSA, and Felipe Athayde (“Athayde”) former Executive 

Vice President of US Development for Tim Hortons met for dinner in Oakville, Ontario. At that 

dinner meeting, several topics were discussed, including (but not limited to): (1) Durigon’s intent 

to hire Paul Barron (Real Estate), Daran Adair (Operations), and Mark Holly (Vice President of 

Development) from Tim Hortons; and (2) development schedules for the Minnesota buildout. 

63. Diaz had previously had concerns about operations, but Durigon’s interest in Adair 

assuaged those concerns. However, Diaz was not willing to permit Durigon to hire Holly and

suggested Blackmore, instead.

64. On September 21, 2015, Goldstein emailed Durigon a spreadsheet detailing 

updated quintiles for Tim Hortons Q1 and Q2 2015. A true and correct copy of this email is 

annexed hereto as Exhibit N.

65. The following day, September 22, 2015, Durigon attended another meeting with 

Goldstein at Tim Hortons’ Oakville headquarters. Marketing team members attended this meeting 

as well in order to present Tim Hortons’ marketing strategy at a national level.

66. On September 27, 2015, Durigon visited the Minnesota market and took detailed 

notes, which were sent to Goldstein the following day, September 28th. A true and correct copy 

of this email is annexed hereto as Exhibit O.

67. A true and correct copy of Durigon’s notes are annexed hereto as Exhibit P.

C. Negotiations Continue with the Second, Draft ARDA

68. On September 27, 2015, Durigon forwards Swistak’s redlines for the revised 

ARDA to Goldstein. In the transmitting email, Durigon explained his position regarding how he 

(and eventually Tim-Minn) would run their business. More specifically, Durigon envisioned a 

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partnership with THUSA, and therefore requested the ARDA be altered to reflect the freedom of 

Tim-Minn to operate its business free from interference. A true and correct copy of this email is 

annexed hereto as Exhibit Q.

69. On September 29, 2015, Durigon forwarded his own redlines to the second ARDA 

draft, and in the transmitting email expressed again the need for more flexibility to operate because 

of the acknowledged lack of familiarity (by both THUSA and Durigon) with the Minnesota market. 

Durigon further highlighted his commitment to the project (as evidenced by $1 million he would 

raise towards franchise fees) and again addressed the buildout schedule, which needed more work. 

A true and correct copy of this correspondence is annexed hereto as Exhibit R.

70. In particular, Durigon objected to the covenant – as drafted in the ARDA – that he 

(and his future company) would invest $15 million into the business, but could not distribute 

profits for the first 8 years of the ARDA. Durigon justifiably expressed frustration that THUSA’s 

requirement was not conducive to a fair business relationship. See Exhibit R.

71. On October 5, 2015, Daniel Edwards, CFE Director of US Development for Burger 

King (a sister company owned by Defendant RBI) emailed Durigon. Edwards advised that, based 

on Burger King’s experience, construction costs in the Minneapolis market were 5-8% above the 

metrics supplied in the data pack the previous month, depending on location and other site 

conditions. A true and correct copy of this correspondence is annexed hereto as Exhibit S.

72. On October 9, 2015, Goldstein provided an Excel file and supplemental maps 

detailing numerous potential infill sites in various counties in the Minneapolis region. A true and 

correct copy of this email correspondence is annexed hereto as Exhibit T.

73. Over the next few weeks, the parties continued to negotiate the terms of the ARDA; 

on October 21, 2015 a meeting was convened at Tim Hortons’ headquarters in Oakville to discuss 

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the ARDA. On October 23, 2015, Durigon received the initial draft of the Exclusivity Agreement. 

The Exclusivity Agreement, in simplest terms, provided that Durigon had the exclusive right to 

the Minnesota ARDA through December 18, 2015 in exchange for $50,000. A true and correct 

copy of the transmitting email is annexed hereto as Exhibit U.

74. Goldstein had previously stated THUSA typically did not do exclusivity 

agreements, which delayed the process. In fact, it was made clear to Durigon that Daniel Schwartz, 

RBI’s CEO, had to personally approve the deal to move it forward and that RBI’s general counsel 

had a hand in drafting the Exclusivity Agreement. See Exhibit U.

75. On October 27, 2015, Durigon returned his comments on the Exclusivity 

Agreement, noting several provisions were not in line with what had previously agreed upon. A 

true and correct copy of the transmitting email is annexed hereto as Exhibit V.

76. By November 5, 2015, a revised, draft ARDA was circulated electronically by Tim 

Brinkley. Durigon, Goldstein, and the attorneys exchanged emails relating to the ARDA and 

Exclusivity Agreement throughout that week, as well as resetting the deadline in the Exclusivity 

Agreement back to accommodate for the delay in finalizing it. A true and correct copy of this 

email correspondence is annexed hereto as Exhibit W.

77. On November 8, 2015, Durigon signaled his acceptance of the terms of the 

Exclusivity Agreement, but noted changes remained necessary in the ARDA. A true and correct 

copy of this email correspondence is annexed hereto as Exhibit X.

78. On November 12, 2015, Durigon and Athayde exchanged emails relating to 

Durigon’s frustration with the slow progress of completing the Exclusivity Agreement. Durigon 

noted he could not bring the deal to his partners for review until it was complete. Moreover, 

Durigon advised Athayde – and by extension THUSA and RBI – that Deloitte had been retained 

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to review the Data Pack and other aspects of the deal in order to provide an analysis of the business 

opportunity. Athayde reiterated RBI’s position that it did not favor exclusivity agreements, and 

noted several key stakeholders had to sign off on the deal, including RBI’s CEO and general 

counsel. In response, Durigon suggested pushing back the termination date on the Exclusivity 

Agreement an additional 60 days to sufficient time to conduct due diligence A true and correct 

copy of this email exchange is annexed hereto as Exhibit Y.

79. On November 11, 2015, Goldstein sent updated modeling and Data Pack to reflect 

potential pricing increases for the market and its impact on the P&L. Durigon shared the updated 

Data Pack with Deloitte that same day. A true and correct copy of this correspondence is annexed 

hereto as Exhibit Z.

80. Tim-Minn LLC was incorporated on November 13, 2015.

81. On November 17, 2015 revised, near-final drafts of the ARDA and Exclusivity 

Agreement were circulated. Durigon again demanded an additional 60 days to conduct due 

diligence. A true and correct copy of this email exchange is annexed hereto as Exhibit AA.

82. Goldstein and THUSA were aware Deloitte was assisting Tim-Minn with its due 

diligence, as evidenced by their emails on November 21, 2015. A true and correct copy of email 

correspondence from November 21, 2015 is annexed hereto as Exhibit AB.

83. By November 27, 2015, Deloitte had returned its initial forecast numbers to 

Durigon, based on the most recent Data Pack. Daniel Wygodny of Deloitte’s Toronto office met 

directly with Goldstein to explain the numbers around that time.

84. On November 30, 2015, Durigon and Goldstein exchanged further emails relating 

to the terms of the Exclusivity Agreement. Durigon explicitly states “before we sign the ARDA 

we need a copy of the Franchise Agreement,” to which Goldstein replies (in red text) “OK, 

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However there will be no changes to the ARDA once we sign the exclusivity agreement.” A true 

and correct copy of this correspondence is annexed hereto as Exhibit AC.

85. Durigon and Tim-Minn were shocked by Goldstein’s representation regarding 

THUSA’s unwillingness to negotiate the terms of the Franchise Agreement because Tim-Minn

and its officers had, since the inception of the relationship, reasonably believed they would have 

an opportunity to negotiate the terms of that documents in the same vein as the ARDA and 

Exclusivity Agreement.

86. Despite Durigon’s demand and Goldstein’s agreement to provide the Franchise 

Agreement before executing the ARDA, no Franchise Agreement was provided.

87. On December 9, 2015 the fully executed Exclusivity Agreement was fully executed 

and it was ultimately extended, via amendment to February 22, 2016.

88. On December 30, 2015, Durigon was provided two, draft registration exemption 

letters by THUSA through Goldstein; Durigon approved the language on January 3, 2016. The 

exemption was ultimately approved by the Minnesota Commerce Department on or about 

February 19, 2016.

89. On January 6, 2016, Goldstein told Durigon that the St. Louis Area Developer

(“AD”) would provide store-level budget figures for his St. Louis locations, but that the P&L for 

the then-existing restaurants was skewed due to overstaffing because the AD was in the process of 

opening up new restaurants and was training the staff. Had the restaurants been at normal staffing 

levels, it was represented the profits would have been higher for those locations.

90. Over the next week or so, Goldstein provided additional data to Tim-Minn. For 

example, on January 7, 2016, Goldstein sent over the pro forma numbers from the St. Louis AD. 

A true and correct copy of the transmitting email is annexed hereto as Exhibit AD. On January 

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13, 2016, Goldstein released average annual value (“AUV”) information for three Designated 

Market Areas (“DMA”). The following day, January 14, 2016, Goldstein provided pricing & 

menu information (“PMIX”) data. This data was keyed to the Detroit, Columbus, and Buffalo 

markets. On January 15, 2016, Goldstein provided sales data from a new St. Louis market store 

which had opened in late June, 2015. The data showed net sales for the location after six months 

of more than $748,000. This was encouraging to Durigon and Tim-Minn.

91. On February 19, 2016, Goldstein requested Tim-Minn produce the required $1 

million deposit (contemplated in the ARDA to be used against franchise fees for Tim-Minn’s 

restaurants as they came on line) ahead of schedule, which was contrary to the express terms of 

the ARDA. A true and correct copy of this email correspondence is annexed hereto as Exhibit AE.

92. On February 25, 2016, Tim Berkley sent Durigon and Tim-Minn an executed copy 

of the ARDA and Joinder/First Amendment and confirmed receipt of all wired funds. With that, 

all conditions in the agreements were met or waived, and Tim-Minn was ready to close the deal 

and move forward. A true and correct copy of this email correspondence is annexed hereto as 

Exhibit AF.

93. The following day, the ARDA was closed and signed and Goldstein introduced 

Durigon to THUSA’s US area developer support team. A true and correct copy of the fully 

executed ARDA is annexed hereto as Exhibit AG.

94. Among the terms in the ARDA, Tim-Minn was obligated to open roughly 280 Tim 

Hortons’ restaurants over the lifetime of the agreement on a schedule set forth therein. See Exhibit 

AG.

95. This development schedule was ultimately unworkable for the reasons set forth 

below.

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D. The Delay In Receiving And Executing The Franchise Agreement

96. Between February 25, 2016 and September 6, 2016, no progress was made on 

obtaining a copy of the Franchise Agreement despite repeated requests, as set forth elsewhere 

herein. On that date, Durigon emailed Goldstein, Holly, and others at THUSA, rebuking THUSA 

for its failure to provide franchise agreements for the restaurants it was on the cusp of opening, 

and only providing a boiler plate copy of a franchise agreement as part of the ARDA process. A 

true and correct copy of this email correspondence is annexed hereto as Exhibit AH.

97. This email exchange highlights Tim-Minn’s lack of sophistication with the 

franchise industry. See Exhibit AH.

98. On or about April 7, 2016, Goldstein emailed Holly a copy of a boilerplate franchise 

agreement and a new, updated FDD (3/2016). A true and correct copy of this correspondence is 

annexed hereto as Exhibit AI.

99. Upon information and belief, the revised FDD was provided to Tim-Minn in a

disguised effort to “re-disclose” Tim-Minn and avoid the prior failure to produce and provide a 

full FDD which complied with Minnesota law and federal regulations under the FTC Act. As 

noted elsewhere herein, the originally-provided FDD was missing key financial information in 

Item 19 and did not conform with the registered copy on file with the Minnesota Commerce 

Department. However, Durigon and Tim-Minn were never advised of THUSA’s ulterior motive 

and were not advised to review the new FDD with counsel.

100. On October 17 and 18, 2016, Goldstein and Durigon exchanged emails in which 

Goldstein attempted to “fast-track” the execution of the Franchise Agreement provided weeks 

earlier, but Durigon was unable to meet on Goldstein’s schedule. Goldstein advised the unsigned 

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Franchise Agreement was “holding up [THUSA’s] process” of publishing the next, updated FDD. 

A true and correct copy of this email exchange is annexed hereto as Exhibit AJ.

101. Tim-Minn’s attorneys reviewed the proposed Franchise Agreement in good faith

and provided recommended changes October 25, 2016; these redlines were forwarded to Goldstein 

and Athayde on October 26, 2016. A true and correct copy of the transmitting email is annexed 

hereto as Exhibit AK.

102. The following day, October 27, 2016, Durigon and Goldstein exchanged emails in 

which Goldstein claimed THUSA would not negotiate terms of the Franchise Agreement, while 

Durigon countered that the Franchise Agreement was provided months after the ARDA and 

contained numerous provisions in conflict with the terms of the ARDA. These were addressed by 

Tim-Minn’s counsel. Tim-Minn had, to date, spent millions building out the Minnesota territory 

and was set to open its first slate of restaurants beginning the following month, yet no Franchise 

Agreement(s) were executed and, critically, THUSA had never provided Tim-Minn an Operations 

Manual or training materials to ensure the restaurants were run according to system specifications. 

A true and correct copy of this email exchange is annexed hereto as Exhibit AL.

103. The parties, through counsel, worked out a compromise position by November 3, 

2016, in which THUSA agreed to modify the Franchise Agreement to conform with the ARDA, 

but would not agree to any further modifications. Tim-Minn was shocked, having spent more than 

a year and millions of dollars pushing the project forward, only to be met with unprincipled 

resistance to reasonable changes at the eleventh hour.

104. In an email dated November 7, 2016, Durigon – on behalf of Tim-Minn – emailed 

Goldstein and Athayde expressing Tim-Minn was discouraged by the lack of progress and 

transparency in negotiating the Franchise Agreement. Durigon’s email further notes that 

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THUSA’s refusal to negotiate was contrary to the “spirit of the [ARDA] that we negotiated in good 

faith,” and has led to mistrust between Tim-Minn and THUSA. More, Durigon reminded 

Goldstein and Athayde that Tim-Minn was never provided an opportunity to negotiate with 

THUSA on the terms of the Franchise Agreement, which it found unacceptable on a number of 

levels. Durigon requested THUSA take a reasonable approach and meet with Tim-Minn on some 

essential terminology modifications to the Franchise Agreement in several, key areas where it is 

in conflict with the ARDA, including but not limited to: cross-termination, transfer of shares, and 

matters relating to Tim-Minn’s expected, future sale of franchised restaurants to independent 

franchisees under the ARDA. A true and correct copy of this email correspondence is annexed 

hereto as Exhibit AM. 

105. Ultimately, by early November 2016 Tim-Minn was ready to begin opening Tim 

Hortons restaurants in its territory and was making a concerted effort to mend any rifts with 

THUSA and move forward cooperatively, together. See Exhibit AM.

E. Tim-Minn Builds Out Its Territory

106. Tim-Minn has opened the following Minnesota locations under the ARDA: (1)

Mall of America, Bloomington (Store No. 6648) on November 13, 2016; (2) Dinkytown (No. 

6649) on November 28, 2016; (3) Brainerd (No. 6677) on December 21, 2016; (4) International 

Falls (No. 6662) on February 17, 2017; (5) East Lake, Minneapolis (No. 6676) on March 26, 2017; 

(6) Brooklyn Park (No. 6651) on May 5, 2017; (7) Savage (No. 7920) on June 19, 2017; (8) 

Maplewood (No. 7895) on July 30, 2017; (9) Bemidji (No. 7911) on September 4, 2017; (10) St 

Cloud (No. 7919) on February 24, 2018; (11) Forest Lake (No. 7893) on April 18, 2018; (12) 

Treasure Island Center, St. Paul (No. 7929) on May 7, 2018; (13) Brooklyn Center (No. 7924) on 

August 6, 2018; and (14) Cliff Plaza, Eagan (No. 6652) on November 19, 2018.

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107. Each of these locations is operated under one of several, wholly-owned limited 

liability companies.

108. Tim-Minn had also applied for two, additional sites in August 2018 which THUSA 

denied because THUSA projected them to be low-sales areas: Apple Valley and Lakeville. Either 

of these sites would have satisfied the 15th store required under the development schedule set forth 

under the ARDA. 

109. After opening the 14 Tim Hortons shops listed above, Tim-Minn was unable to 

continue expansion because THUSA took an inordinate amount of time to issue formal disapproval 

letters for its prospective sites. Tim-Minn’s apparent lack of continued growth is, however, not 

for lack of trying: Tim-Minn maintains weekly contact with its real estate broker regarding 

potential sites to build new Tim Hortons units. However, because of THUSA and RBI’s 

unreasonable disapproval of new sites (even when the sales projections appear strong), Tim-Minn 

is unable to enter negotiations with prospective landlords because they do not wish to mislead a 

potential business associate, which occurred with the Apple Valley and Lakeville sites. 

Consequently, currently Tim-Minn has no new locations in its development pipeline due to a 

confluence of factors which include, but are not limited to: (1) lack of funds due to losses across 

existing locations; (2) sites not receiving THUSA approval; and (3) Tim-Minn’s relationships with 

local landlords has suffered due to THUSA’s preemptive (and aborted) suit to enforce the ARDA.

110. Strikingly, THUSA’s refusal to approve the Apple Valley and Lakeville sites was 

predicated on the sales projections for the market based on actual numbers established solely due 

to Tim-Minn’s prior and ongoing operations.

111. Whereas the 14, prior site approvals were based on the incomplete, misleading, and 

negligently sourced sales data provided to Tim-Minn in the Data Pack produced by Goldstein at 

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the time Durigon was first disclosed in August 2015 because neither Tim-Minn nor THUSA had 

actual sales numbers from the preceding year against which they could accurately model. True 

and correct copies of these denial letters are annexed hereto as Exhibit AN. 

112. Indeed, Dustin Tremellen, an RBI employee, confirmed the denial at Lakeville was 

entirely due to the low sales projection. However, the denial cost Tim-Minn goodwill because 

THUSA/RBI had participated in the site plan and elevations with the Lakeville property owner, 

only to pull the plug after obtaining concessions and giving all indications to the landlord – a third 

party – the site was likely to be approved. A true and correct copy of the email correspondence 

surrounding these conversations is annexed hereto as Exhibit AO.

113. Tim-Minn requested THUSA/RBI review the Lakeville site again, but Tremellen 

did not do so; on a telephone call he verbally advised Tim-Minn “don’t bother” trying to push the 

site because it would not be approved..

114. THUSA/RBI’s refusal to work with Tim-Minn on sites due to the fault in THUSA’s 

projected financial disclosures – which Tim-Minn relied upon to its detriment – has imperiled 

continued development in the territory and may result in a breach of the ARDA5, which Tim-Minn

has attempted in good faith to avoid.

115. As these difficulties mounted, RBI and THUSA filed a pre-emptive and utterly 

unnecessary lawsuit which severely and negatively impacted Tim-Minn’s relationships with local 

property owners and has continued to be one of the prime reasons behind Tim-Minn’s difficulty 

opening successive locations. 

 

5 As amended

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F. THUSA Fails to Perform Under the ARDA

116. Among the many terms of the ARDA, THUSA was obligated to provide to TimMinn numerous documents, including but not limited to: (1) a copy of the then-current Tim 

Hortons Franchise System Operations Manual (“Operations Manual”); (2) a copy of the thencurrent Tim Hortons Franchise System Development Manual (“Development Manual”); and (3) a 

copy of the then-current Tim Hortons Franchise System Employee Training Manual (“Training 

Manual”).

117. THUSA did not provide copies of its Operations Manual, Development Manual, or 

Training Manual to Tim-Minn at any time prior or subsequent to the execution of the ARDA.

118. Tim-Minn was forced to develop its own training program and operations manual 

virtually from scratch as a result. Tim-Minn did not receive the benefit of its bargain.

119. In addition, THUSA promoted the Tim Hortons Brand Standards system, which 

was not designed for, and therefore incompatible with, the entrance into a wholly new market with 

no brand recognition. This negatively impacted Tim-Minn’s (and its franchised restaurants’) dayto-day operations, causing them to lose a substantial amount of money.

120. Further, under the terms of the Amended ARDA, THUSA was obligated to invest 

in marketing the Tim Hortons brand to the Minnesota market on behalf of Tim-Minn. However, 

THUSA spent carelessly and interfered with the marketing agencies it hired to do the work. In 

two, separate instances, agencies dropped the account – after being paid – because THUSA refused 

to take into account local conditions and needs. Instead THUSA insisted on a marketing strategy 

not tuned to the Minnesota marketplace. This cost Tim-Minn roughly $650,000 of the $1.5 million 

budget set forth in the ARDA.

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121. More, Tim-Minn came to learn the equipment package (Schedule A to the ARDA) 

was incomplete, misleading, and in several instances contained inconsistent information. That is 

to say, identical equipment was priced differently between Tim Hortons shops and Tim-Minn

learned THUSA was selling it old equipment at current market value for new equipment. In 

addition THUSA was obligated to discount the scheduled prices for the first, two restaurants TimMinn was opening (as set forth above) but those discounts were not applied properly, if at all.

122. These additional, unexpected costs reduced Tim-Minn’s cash flow, which were 

further exacerbated by THUSA and RBI’s finance team wrongful and unauthorized withdrawal 

from Tim-Minn’s accounts. 

123. As but a few examples, RBI carelessly withdrew money from incorrect accounts, 

charged Tim-Minn royalty fees not reflected in the Amended ARDA and charged fees due to other 

developers in other markets, causing Tim-Minn damages including, but not limited to, diminished 

cash flow for several restaurants and/or accounts owned by Tim-Minn.

124. THUSA failed to provide Tim-Minn access to “TimTrac” an online management 

platform represented by THUSA and RBI to be a streamlined portal to connect people from each 

organization assigned to a given project/market. TimTrac was represented by THUSA and RBI to 

be an invaluable resource in the development of Tim-Minn’s franchise sites and the Minnesota 

market. However, TimTrac access was withheld for several months, until October 2016 when 

THUSA eventually provided limited access to the system. Tim-Minn was told there were legal 

hurdles to providing access, which further delayed deployment of the software. As a result, TimMinn was forced to begin construction and, in some cases complete, restaurants without the use of 

TimTrac because it had no choice. Ultimately, the THUSA’s lack of organization and ability to 

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follow-through on its own processes did delay the opening of one location because the needed 

Schedule A was not processed in a timely manner.

125. Finally, RBI employee and officer turnover contributed to a significant number of 

communication issues which were never satisfactorily resolved in areas from operations to 

construction management.

126. By May 2017, Tim-Minn reached out to RBI and requested an amended ARDA to 

accommodate the numerous missteps, failures, and unanticipated difficulties. It was, at that point, 

clear to Tim-Minn that, had THUSA provided accurate information in the Data Pack, Tim-Minn 

would never have executed the ARDA.

G. THUSA Negotiated the Amended ARDA in Bad Faith

127. Beginning in May 2017, and continuing for several months, Tim-Minn, THUSA, 

and RBI negotiated an amended ARDA.

128. At the time, the Tim Hortons brand standards were not workable or a new market, 

such as the Minnesota market, as noted elsewhere herein.

129. Tim-Minn requested the development schedule be modified in order to recoup its 

unanticipated losses because the due diligence it had conducted prior to executing the ARDA was 

based on faulty, misleading, and inaccurate financial representations provided by Goldstein on 

behalf of THUSA.

130. In addition, the royalty schedule in the ARDA was unworkable due to the realworld economics in the Minnesota market, a reality THUSA had no experience with and failed to 

prepare Tim-Minn for and for which Tim-Minn could not reasonably be prepared given the 

financial data provided by Goldstein.

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131. Moreover, in an email sent from Durigon to Goldstein on July 18, 2017, Durigon 

noted that THUSA’s failure to provide adequate marketing materials, training materials, and 

operations materials, as well as the foregoing financial missteps and miscues, cost Tim-Minn 

“millions of dollars getting a footing in the new market and educating THUSA on what needs to 

be done in order to be successful in Minnesota, because you acknowledged your mistakes...” A 

true and correct copy of this correspondence is annexed hereto as Exhibit AP.

132. Between July and October, 2017, numerous emails were exchanged by Tim-Minn 

and Goldstein, and the amended ARDA took shape. See Exhibit AP.

133. There were numerous issues to be negotiated, not the least of which THUSA/RBI’s 

insistence on paying out the existing Schedule A in full, but (and as noted above) the invoicing 

was inconsistent and Tim-Minn began to understand THUSA was acting in bad faith and taking 

advantage of its relative inexperience with the system.

134. These inefficiencies and errors led to construction delays which caused Tim-Minn 

to expend additional capital re-mobilizing general contractors on construction projects and, in 

some case, pay delay damages to contractors.

135. For example, Cliff Plaza was delayed weeks because Tremellen and RBI failed to 

initiate the process of putting a Schedule A package together for that location – a 6-10 week 

turnaround. The project general contractor could not commence construction and Tim-Minn was 

stuck paying rent on an unusable site, which in turn meant the restaurant opened at a loss. TimMinn’s Brooklyn Center location suffered similar delays and costs; other locations suffered from 

similar, if less drastic delays and cost overruns.

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136. On December 4, 2017, Goldstein emailed Durigon and demanded the Amended 

ARDA be executed “by end of today.” A true and correct copy of this email correspondence is 

annexed hereto as Exhibit AQ.

137. The following day, Durigon emailed Goldstein to advise the Amended ARDA 

would be signed by Tim Minn and an executed copy was forwarded to Goldstein at 5:48 PM. See

Exhibit AQ.

138. On December 5, 20176, the Amendment to Area Representative and Development 

Agreement (“Amended ARDA”) was executed by Durigon on behalf of Tim-Minn. Notably, TimMinn’s obligation to open Tim Hortons restaurants was reduced to roughly 190 units over the 

lifetime of the ARDA, which was still an overwhelming target based on THUSA’s failure to 

properly market the territory and invest in public awareness of the Tim Hortons brand. A true and 

correct copy of the Amended ARDA is annexed hereto as Exhibit AR.

139. The Amended ARDA modifies and replaces language relating to, among other 

things, royalties, development schedules, and other issues which had plagued the original ARDA. 

See Exhibit AR.

140. In addition to the foregoing, the Amended ARDA includes a “General Release” 

which violates the MFA. The General Release states, in pertinent part:

 

6 The Amended ARDA is dated December 1, 2017, but it was not signed until December 5, 2017.

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See Exhibit AR.

141. The purpose of the General Release is clear and unambiguous: THUSA and RBI 

desired to whitewash their prior violations of Minnesota law by unlawfully and improperly 

obtaining Tim-Minn’s release of its valid claims under the MFA and Minnesota law. This flies in 

the face of the express non-waiver provision contained in Minn. Stat. 80C.21.

142. More specifically, Minn. Stat. § 80C.21 prohibits franchisors from requiring 

franchisees from waiving rights under the MFA at the time the franchise agreement is executed; 

however Minnesota court have recognized § 80C.21 is broadly interpreted to prevent just this sort 

of attempt by a franchisor to limit its liability for misrepresentations in the context of selling 

franchises to prospective franchisees.

143. Strikingly, the same day RBI initiated a lawsuit against seven of Tim-Minn’s 

wholly-owned LLCs for violations of the ARDA. Goldstein, THUSA, and RBI had bargained in 

bad faith to obtain a signature on the Amended ARDA and, despite receiving what they demanded, 

they filed an unnecessary and moot lawsuit regardless. Outreageously, the suit held the St. Cloud 

and Forrest Lake restaurants in limbo: despite the fact that both locations were fully constructd, 

they sat empty and bereft of equipment for roughly four months, during which time Tim-Minn was 

forced to pay its General Contractor for its work, as well as rent for the locations, and labor costs 

for a trained, ready workforce with nowhere to actually work. This, alone, significantly diminished 

available cash flow for Tim-Minn. The suit was filed in the District Court for the Southern District 

of Florida, bearing Case No. 1:17-cv-24395-FAM.

144. The suit was withdrawn without prejudice pursuant to Fed. R. Civ. P. 41(a)(1)(A)(i) 

on December 11, 2017, but only after THUSA and RBI held Tim-Minn ransom on a Schedule A 

payment, and an Order of Dismissal was issued on December 27, 2017.

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145. The suit had far-reached effects, including but not limited to repeated, continuous, 

and continuing fall out with Minnesota property owners who were aware of the litigation and 

became leery of getting into business with Tim-Minn and its subsidiaries thereafter. As but one 

example, Tim-Minn’s real estate broker, Colliers International caught wind of the suit when a local 

news organization, the Star Tribune published an article online and in print about it. Colliers 

reported at least one landlord had called with questions about the article, and others were expected. 

A true and correct copy of this email correspondence is annexed hereto as Exhibit AS.

146. Holly forwarded the Colliers email to Goldstein, expressing concern about the 

negative feedback from the suit and article and identifying the impact to Tim-Minn’s business. 

Goldstein admitted the suit was “a major f--- up.” See Exhibit AR.

H. The ARDA Is A Franchise Agreement

147. Tim-Minn and THUSA have executed a series of agreements, including the ARDA

and the Amended ARDA. Each of these agreements was reduced to a writing executed by the 

parties and for which valid consideration was given by both sides. With respect to the Exclusivity

Agreement and ARDA, Defendant RBI had significant input in the drafting of both, as well as 

assisting THUSA’s performance of its obligations thereunder.

148. To be clear, the February 25, 2016 ARDA between Tim-Minn and THUSA is a 

franchise agreement. § 16.1 states unambiguously that “[i]t is expressly agreed that the Parties 

intend by this Agreement to establish between them the relationship of franchisor and 

franchisee.”) 

149. Minnesota requires franchisors to register their FDDs and Franchise Agreements 

prior to offering same for sale. See Minn. Stat. § 80C.02, 80C.04.

150. Upon information and belief, THUSA registered its FDD – and has regularly 

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updated its FDD in accordance with Minnesota and federal law – regularly for several years and 

the FDD was validly registered with the Commerce Department at the time it was disclosed to 

Tim-Minn.

151. Despite the foregoing, the ARDA between Tim-Minn and THUSA was not the 

typical franchise sold in Minnesota – in fact it was at the time the only area development franchise 

agreement THUSA had contemplated in Minnesota and THUSA attempted to obtain a registration 

waiver under Minn. Stat. §80.03(g) because the ARDA was not registered with the Commerce 

Department as required under the MFA.

152. THUSA’s failure to properly disclose Tim-Minn by using an adulterated FDD was 

and is not excused by the exemption of the ARDA from registration in Minnesota.

I. THUSA’s Improper Pricing Model

153. In addition to the foregoing malfeasance, THUSA has violated the terms of its FDD 

and Franchise Agreement(s) by selling products to Tim-Minn, on behalf of its franchised 

restaurants, at unreasonable markups.

154. THUSA is Tim Hortons’ US-based franchisor.

155. Specifically, at Item 8 of the May 2015 FDD on which Tim-Minn was disclosed, 

Tim Hortons (and by extension, THUSA) states:

...you must purchase or lease all products, fixtures, furnishings, building 

components, equipment, décor, signs, paper goods, containers, cartons, packaging, 

supplies, and smallwares and other utensils, services, including project 

management services, product ingredients, insurance and other items installed in 

used, or sold by the Shop (“Items”) solely from suppliers who have been approved 

by us and all these Items must meet our specifications. We can designate ourselves, 

our affiliates, or a third party as the sole supplier for any Item. ... We and our 

affiliates may charge what we consider to be a reasonable mark-up (emphasis 

added) on items sold to you.

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156. The FDD further notes that Tim Hortons “estimate[s] that the purchase from 

approved suppliers will represent approximately 100% of your total purchases...”

157. According to the FDD and upon information and belief, THUSA purchases 

numerous items from approved suppliers, then sells it to a wholly owned entity, The TDL Group 

Corp. (“TDL”). TDL is the franchisor for Tim Hortons Canadian businesses and has 

approximately 3,700 Tim Horton “Shops” franchised in that country.

158. TDL, in turn, sells these supplies and goods to a distributor, which, in turn, sells the 

items to franchisees and franchisee guarantors like Tim-Minn. TDL also sells Canadian equipment 

to U.S. companies/distributors without adequate details on exchange rates and CAD and/or US 

taxes.

159. TDL and THUSA acknowledge they “will derive revenue from sales of Selected 

Goods and Articles to” the distributors, who, in turn, profit on the sale to Plaintiff.

160. Notwithstanding the foregoing, THUSA represented to Tim-Minn that any charges 

it and its affiliates make would be “reasonable.” However, in practice, those charges are not 

“reasonable” by any metric – and this is by design.

161. Tim-Minn was required to operate their Tim Hortons franchised shops pursuant to 

the policies and procedures established by Defendants for the operation of a Tim Hortons franchise 

shop. 

162. In particular, Tim-Minn was required to purchase inventory, supplies and 

equipment from the vendors specified by Defendants to operate their Tim Hortons shops.

163. THUSA abandoned the specific representations in the May 2015 FDD provided to 

Tim-Minn that only “reasonable” profits would be made on required purchases of products and 

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services from either Tim Hortons directly or its approved suppliers.7 In fact, the prices paid by 

Plaintiff for supplies from THUSA directly or from an “approved supplier” were grossly increased, 

permitting THUSA to wrongfully obtain additional income.

164. While THUSA represented it will take a “reasonable” profit on the sale of certain 

items, it has failed to limit itself to “reasonable” profits on numerous products and supplies.

165. For example, and upon information and belief THUSA charges Tim-Minn in excess 

of $104.08 per case more for Applewood bacon than Wendy’s franchisees will pay for the identical 

product. Tim Hortons’ franchisees also pay $23.85 more for boxes of diet and regular Coke; $10.92 

more for a case of medium, large, or extra-large vinyl gloves; $11.92 more for a case of 9 inch 

plastic straws; and $9.53 more for a 50 count of register thermo tape than do Wendy’s franchisees. 

Other examples include charging double for credit card processing fees.

166. THUSA’s scheme to profit off of Tim-Minn, is an unconscionable business practice 

insofar as it is disguised and intentionally not properly disclosed to Tim-Minn, in violation of the 

MFA.

167. Tim-Minn would not have entered into franchise agreements with THUSAhad the 

true nature of these so-called “reasonable” mark-ups been made apparent.

168. THUSA exploited the fact that there exists a substantial imbalance of power 

between it and Tim-Minn, which imbalance allowed Tim-Minn to implement this business 

scheme.

COUNT I

VIOLATION OF THE MINNESOTA FRANCHISE ACT, 

Minn. Stat. § 80C.01 et seq.

169. Plaintiff repeats and realleges Paragraphs 1 through 168 as if set forth fully herein.

 

7

Item 8 “Restrictions On Sources of Products and Services”, FDD page 26: “We and our affiliates may charge only 

what we consider to be a reasonable mark-up on items sold to you.”

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170. Minnesota has passed strong, remedial legislation intended and designed to protect 

Minnesota franchisees from unfair contracts and abuses by franchisors: the Minnesota Franchise 

Act (“MFA”)

171. Tim-Minn is a “franchisee,” a “subfranchisor” and an “area franchisee” as those 

terms are defined under the MFA. See Minn. Stat. § 80C.01(Sub 5, 7, 8).

172. THUSA is a franchisor as that term is defined under the MFA. See Minn. Stat. § 

80C.01 (sub. 6).

173. The MFA requires franchisors who sell franchises in Minnesota register their 

“offering circular” with the Commerce Department, and any franchisee sold a franchise in 

Minnesota must be provided a copy of the registered, state-approved offering circular. See Minn. 

Stat. §§ 80C.02, 80C.05, 80C.06.

174. Each application for registration must contain a full “public offering statement” 

which meets the requirements of the MFA. See Minn. Stat. § 80C.04.

175. A properly-formulated FDD (as required under the FTC Franchise Rule) meets the 

requirements of § 80C.04, with some state-specific additional disclosures.

176. Minnesota does not require franchisors to include financial representations in their 

offering circulars.

177. However, it is a prohibited practice under the MFA for any person to sell or offer 

for sale a franchise by means of any untrue statement of material fact or omission of a material 

fact necessary in order to make the statements made, in light of the circumstances under which 

they were made, not misleading. See Minn. Stat. § 80C.13 Subd. 2.

178. At all times relevant hereto, THUSA had a validly registered offering circular (or 

FDD) on file with the Commerce Department. At the time Tim-Minn became interested in a 

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Minnesota area development agreement, the active and most current offering circular was 

THUSA’s May 2015 FDD. See Exhibit D.

179. However, the FDD provided to Tim-Minn was incomplete: the financial disclosures 

contained at Item 19 of the FDD were obscured and/or omitted and removed entirely.

180. Instead, THUSA provided to Tim-Minn copious amounts of profit and loss 

statements from area developers around the United States, as well as the documents identified in 

Paragraph 43 above.

181. The financial representations provided to Tim-Minn by THUSA were false, 

misleading, and deceptive in violation of the MFA and the rules promulgated thereunder. See, e.g. 

Minn. Admin. Rule § 2860.4500.

182. Failure to abide by the MFA entitles franchisees to monetary damages and other 

relief. See Minn. Stat. § 80C.17.

183. Tim-Minn relied upon the false, misleading, and/or deceptive financial 

representations provided by THUSA – as noted elsewhere herein, Tim-Minn retained Deloitte to 

create financial forecasts based upon the financial disclosures provided by THUSA and made its 

decision to invest millions of dollars in the Tim Hortons system based on the Deloitte reports.

184. The Minnesota market has proven to be demonstrably different from the data 

provided by THUSA, such that Tim-Minn has lost a considerable amount of money as a result of 

the incorrect forecasting based almost entirely upon THUSA’s provided data.

185. As a result of the foregoing, Tim-Minn has been damaged in an amount to be 

established at trial.

COUNT II

VIOLATION OF THE MINNESOTA FRANCIHSE ACT, 

Minn. Stat. §80C.13 subd. 2

186. Plaintiff repeats and realleges Paragraphs 1-185 as if set forth fully herein.

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187. As set forth in detail in the preceding paragraphs, THUSA and RBI did produce 

and register a certain FDD with the State of Minnesota in May, 2015.

188. This FDD was provided – in adulterated form, as set forth above – to Tim-Minn (in 

the person of Durigon, acting on behalf of Tim-Minn.)8 More specifically, the FDD provided to 

Durigon as part of the initial disclosure was missing several pages from the Item 19 disclosures, 

which were included the May 2015 FDD registered with the Minnesota Commerce Department.

189. The FDD, at Item 8, represents, inter alia, that THUSA will charge a “reasonable” 

markup of goods it requires franchisees – like Tim-Minn – to purchase from either THUSA 

directly, or one of its approved vendors.

190. In practice, however, the markups on items and goods sold to Tim-Minn were 

objectively unreasonable: in some cases Tim-Minn was charged, upon information and belief, 

between 20-50% above market rate for necessary items it was contractually prohibited from 

purchasing through another source.

191. Given the fact that THUSA’s markups on items Tim-Minn needed to purchase from 

it, or its approved suppliers, were not unreasonable, THUSA’s FDD contains an untrue – or at 

minimum exceptionally misleading – statement of material fact in violation of Minn. Stat. §80C.13 

Subd. 2.

192. Moreover, such misleading and objectively untrue statements represent an unfair 

and inequitable practice under Minn. Stat. §80C.14 Subd. 1 and 2, as well as Minn. Admin. Rule

2860.4400 (G).

193. Tim-Minn has been damaged by these material misrepresentations and false 

statements insofar as it has been forced to spend thousands of dollars over market to line THUSA’s 

 

8 Tim-Minn was not yet an existing entity, but was contemplated by Durigon at that time and all actions undertaken 

by Durigon were done in furtherance of the then-to-be-created entity, Tim-Minn.

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coffers in an amount to be established at trial.

COUNT III

VIOLATION OF THE MINNESOTA FRANCIHSE ACT, 

Minn. Stat. §80C.21

194. Plaintiff repeats and realleges Paragraphs 1-193 as if set forth fully herein.

195. THUSA included a General Release with the Amended ARDA which it forced 

Tim-Minn to sign under threat of litigation and termination of the ARDA and loss of its business.

196. The General Release violates the express language of Minn. Stat. § 80C.21 insofar 

as it purports to act as a waiver of rights Tim-Minn is entitled to under the MFA, including but not 

limited to, Tim-Minn’s right to bring claims against THUSA for misrepresentation in connection 

with the original sale of its franchises.

197. This repreents a prohibited act under applicable Minnesota law and regulation.

198. Tim-Minn has been damaged by these material misrepresentations and false 

statements insofar as it has been forced to spend thousands of dollars over market to line THUSA’s 

coffers in an amount to be established at trial.

COUNT IV

BREACH OF THE IMPLIED COVENANT OF 

GOOD FAITH AND FAIR DEALING

199. Plaintiff repeats and realleges Paragraphs 1 through 198 as if set forth fully herein.

200. The franchise agreement between THUSA and Tim-Minn gives rise to express 

obligations and also gives rise to a mutual implied covenant of good faith and fair dealing between 

the parties.

201. Under this covenant, each party has an obligation and duty to act fairly towards the 

other, to do nothing destructive of the other party’s right to enjoy the fruits of the contract, and to 

do everything that the contract presupposes they will do to accomplish its purpose. 

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202. The obligations of THUSA to abide by the implied covenant of good faith and fair 

dealing is heightened by the substantial imbalance of power between THUSA and Tim-Minn. 

203. THUSA failed to act in good faith and deal fairly with Tim-Minn because it 

provided incomplete, incorrect, and misleading financial information to Tim-Minn and in so doing 

it sought to insulate itself from liability by appending invalid disclaimers to those financial 

representations.

204. THUSA’s financial representations carry with them language which appear to be 

SEC Safe Harbor disclaimers: however, Tim-Minn is and was not an investor and the SEC 

disclaimers do not eliminate THUSA’s obligation to fully, fairly, and completely disclose financial 

data once it had chosen to do so.

205. Tim-Minn reasonably and justifiably relied upon THUSA’s disclosures to its 

detriment, spending millions of dollars on an area development deal it never would have entered 

had it been provided an accurate picture of the financial needs of the territory.

206. As a result of the foregoing, Tim-Minn has been damaged in an amount to be 

established at trial.

COUNT V

FRAUD

207. Plaintiff repeats and realleges Paragraphs 1 through 206 as if set forth fully herein.

208. As stated elsewhere herein, THUSA provided false and misleading financial 

information to Tim-Minn in connection with its effort to sell an area development agreement (the 

ARDA) to Tim-Minn.

209. THUSA’s false, misleading, and incomplete financial disclosures were known by 

THUSA to be false, misleading, and/or incomplete at the time they were disclosed to Tim-Minn. 

As evidence hereof, THUSA knowingly appended invalid SEC Safe Harbor disclaimers to its 

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disclosures in a naked attempt to insulate itself from liability.

210. THUSA took advantage of Tim-Minn and Durigon, knowing they lacked 

sophistication and experience in the quick service restaurant industry and the Minnesota market.

211. Tim-Minn reasonably and justifiably relied upon the representations of its 

franchisor to its detriment.

212. As a result of the foregoing, Tim-Minn has been damaged in an amount to be 

established at trial.

COUNT VI

NEGLIGENT MISREPRESENTATION

213. Plaintiff repeats and realleges Paragraphs 1 through 212 as if set forth fully herein.

214. THUSA owed Tim-Minn a duty of care, specifically a duty to provide accurate and 

complete financial data as required by the MFA and common law of Minnesota.

215. THUSA supplied financial data to Tim-Minn for Tim-Minn to use as guidance and 

modeling as part of the parties’ business transactions.

216. Tim-Minn was justified in its reliance upon the THUSA-supplied financial data.

217. The THUSA-supplied data was false and misleading.

218. THUSA failed to exercise reasonable care and/or competence in collecting and 

disseminating the financial performance data it supplied to Tim-Minn.

219. As a result of the foregoing, Tim-Minn has been damaged in an amount to be 

established at trial.

COUNT VII

BREACH OF CONTRACT

220. Plaintiff repeats and realleges Paragraphs 1-219 as if set forth fully herein.

221. The ARDA, as Amended, is a valid, binding contract between Tim-Minn and 

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THUSA.

222. The FDD Tim-Minn was disclosed on (the May 2015 adulterated version) is 

specifically incorporated into the ARDA and is binding on both parties.

223. THUSA breached the franchise agreement with Tim-Minn by, among other things, 

breaching the express contractual representation in the FDD that it would only charge “reasonable” 

mark-ups on products and supplies required to bed purchased from Tim Hortons or its designated 

affiliate.

224. Defendants’ express breaches of the ARDA are a substantial factor in causing TimMinn’s damages.

225. As a result of the foregoing, Tim-Minn is entitled to damages to be established at 

trial.

COUNT VIII

UNJUST ENRICHMENT

226. Plaintiff repeats and realleges Paragraphs 1-225 as if set forth fully herein.

227. Defendants have, by virtue of the ARDA signed by Tim-Minn, received thousands 

of dollars in payments from the unreasonable mark-ups imposed on goods and services required 

by THUSA for use in the franchisees’ shops.

228. The money received by THUSA and RBI from these mark-ups was unconscionably 

obtained because Defendants’ unreasonably aggregate through middlemen which causes 

additional costs to be passed down the chain to the franchisees, such as Tim-Minn.

229. Defendants have, therefore, received from Plaintiff a current on-going income 

benefit through inflated mark-ups.

230. THUSA, and by extension Defendant, RBI, has a pecuniary interest in milking as 

much money from Tim-Minn as possible via these unreasonable mark-ups and effectively holds it

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hostage to these exorbitant fees because it is bound, by the ARDA and individual franchise 

agreements for its franchised shops, to purchase necessary items solely from Defendants.

231. Defendants have additional leverage: franchisees (such as Plaintiff) cannot choose 

outside suppliers for these necessary items because to do so would violate their respective 

franchise agreements and could result in termination of their franchises.

232. Effectively, Defendants have Tim-Minn captive and knowing this is so, gouge them 

to an unreasonable and prohibitively expensive degree.

233. By virtue of these actions, Tim-Minn has been damaged in an amount to be 

established at trial.

COUNT IX

BREACH OF CONTRACT

234. Plaintiff repeats and realleges Paragraphs 1-233 as if set forth fully herein.

235. The ARDA, as Amended, is a valid, binding contract between Tim-Minn and 

THUSA.

236. Under the terms of their agreement, THUSA and by extension RBI, was obligated 

to perform certain obligations, including but not limited to providing training and operational 

support and manuals to Tim-Minn, providing access to proprietary computer systems such as 

TimTrac, and to ensure Tim-Minn had what it needed to meet its own obligations under the terms 

of the ARDA and/or Amended ARDA, as well as the various franchise agreements signed by TimMinn’s wholly-owned subsidiary entities in order to operate Tim-Minn’s network of Tim Hortons 

shops.

237. THUSA and RBI failed to perform their numerous obligations under the terms of 

the various agreements in effect between the parties.

238. This failure to perform made it impossible for Tim-Minn (or its subsidiaries) to 

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perform their own obligations due to the fact that Tim-Minn’s performance was often contingent 

upon THUSA and RBI’s performance, which was constantly delayed or wholly defaulted.

239. As a direct and proximate result of THUSA and RBI’s breach of the various 

contracts, Tim-Minn has been damaged in an amount to be established at trial.

COUNT X

BREACH OF THE IMPLIED COVENANT OF 

GOOD FAITH AND FAIR DEALING

240. Plaintiff repeats and realleges Paragraphs 1-239 as if set forth fully herein.

241. The franchise agreement between THUSA and Tim-Minn gives rise to express 

obligations and also gives rise to a mutual implied covenant of good faith and fair dealing between 

the parties.

242. Under this covenant, each party has an obligation and duty to act fairly towards the 

other, to do nothing destructive of the other party’s right to enjoy the fruits of the contract, and to 

do everything that the contract presupposes they will do to accomplish its purpose. 

243. The obligations of THUSA to abide by the implied covenant of good faith and fair 

dealing is heightened by the substantial imbalance of power between THUSA and Tim-Minn. 

244. THUSA failed to act in good faith and deal fairly with Tim-Minn because THUSA 

undermined Tim-Minn’s ability to meet its development schedule by filing an unnecessary, 

preemptive lawsuit in the Southern District of Florida which, as a public record, was the subject 

of published journalism and much comment in the Minnesota market where Tim-Minn conducts 

its business.

245. This unnecessary and wasteful lawsuit – dismissed less than a week after it was 

filed in admitted error – caused and continues to cause unnecessary and expensive delays in TimMinn’s development schedule because local property owners are unwilling to deal with Tim-Minn 

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on terms which are fiscally responsible for Tim-Minn, whereas prior to the suit Tim-Minn was 

able to stay within budgetary parameters more easily and find workable compromises with local 

real estate ownership.

246. As a direct and proximate result of THUSA and RBI’s breach of the various 

contracts, Tim-Minn has been damaged in an amount to be established at trial.

WHEREFORE, and for the reasons set forth elsewhere herein, Plaintiff Tim-Minn, Inc. 

is entitled to judgment on the foregoing Counts of this Complaint in the form of:

A. Compensatory damages;

B. Actual damages;

C. Punitive damages;

D. Statutory damages;

E. Attorney’s fees; 

F. Costs of suit; and

G. Any and all other such relief as this Court deems just and equitable under the 

circumstances.

Dated: February 20, 2019 BOWMAN AND BROOKE LLP

By: /s/Steven L. Reitenour 

 Richard G. Morgan (#157053)

 richard.morgan@bowmanandbrooke.com

 Steven L. Reitenour (#225691)

 steve.reitenour@bowmanandbrooke.com

150 South Fifth Street, Suite 3000

Minneapolis, Minnesota 55402

Telephone (612) 339-8682

Facsimile: (612) 672-3200

Attorneys for Plaintiff

Tim-Minn, Inc.

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Of counsel:

MARKS & KLEIN, LLP

Gerald A, Marks, Esq.

Steven T. Keppler, Esq.

63 Riverside Avenue 

Red Bank, New Jersey 07701 

T: (732) 747-7100

F: (732) 219-0625

jerry@marksklein.com

steven@marksklein.com

Pro Hac Vice Admission to be Filed

DEMAND FOR JURY TRIAL

Plaintiff hereby demands a trial by jury as to all issues raised in this pleading.

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