Sunoco Terminating All Franchise Agreements in Ontario
Retailers launch class-action suit seeking $200 million for franchise violations
TORONTO -- Sunoco retailers in Ontario have launched a class-action lawsuit, seeking up to $200 million (Canadian; $194 million U.S.), against Suncor, alleging that the company has violated their franchise agreements by planning to terminate their stations, reported The Financial Times.
This lawsuit was filed in the Ontario Superior Court of Justice on Jan. 28, 2010, on behalf of all Sunoco gas station operators in Ontario against Suncor Energy Products Inc. and its parent company Suncor Energy Inc., David Sterns of Toronto-based law firm Sotos LLP, which is representing the retailers, said in a statement.
The lawsuit follows on Suncor's internal announcement in January 2010 of its intention to terminate the retailer franchise agreements of all 300 of its independent Sunoco retailers in Ontario. Approximately 100 retail sites will be closed in April 2010, while the remaining sites will be rebranded under the Petro-Canada banner with different operators. All 300 current Sunoco retailers will be terminated in the process, Sotos said.
The retailers claim in the lawsuit that Suncor failed to comply with Ontario's franchise legislation when they entered into their most recent franchise agreements. This entitles the retailers to rescind their franchise agreements and obtain substantial compensation, said Sotos.
"Suncor's franchise operators have been treated as chattels in the amalgamation process. The operation of Ontario's franchise legislation will result in Sunoco's dealers, who built up the Sunoco brand through years of hard work and loyal service, receiving a return on their personal efforts and investments.," Sterns told the CNW Group in a separate report.
The termination of the Sunoco retailers is part of Suncor's decision to eliminate the Sunoco brand in Ontario following Suncor's merger with Petro-Canada in 2009, the statement said.
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Click here to view the court documents.
Suncor Energy Products Inc. markets transportation fuels and convenience products in Ontario under the brand name Sunoco. It is a wholly owned subsidiary of Suncor Energy, an integrated energy company based in Calgary, Alberta. Sunoco in Canada is unrelated to Sunoco in the United States, which is operated by Sunoco Inc., Philadelphia.
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Toronto, Ontario – Suncor Energy Products will sell or rebrand all 300 of its independent Sunoco retailers in Ontario, prompting an intended class action lawsuit by the service station operators. The termination is part of Suncor’s decision to eliminate the Sunoco brand in Ontario following Suncor’s amalgamation with Petro-Canada in 2009.
The lawsuit follows on Suncor’s internal announcement last week of its intention to terminate the retailer franchise agreements of its 300 retailers. Approximately 100 retail sites will be sold in April 2010, while the remaining sites will be rebranded under the Petro-Canada banner with different operators. All 300 current Sunoco retailers will be terminated in the process.
In the lawsuit, the retailers assert that Suncor failed to comply with Ontario’s franchise legislation when they entered into their most recent franchise agreements. This entitles the retailers to rescind their franchise agreements and obtain substantial compensation.
“Suncor’s franchise operators have been treated as chattels in the amalgamation process,” said David Sterns, lawyer for the plaintiffs. “The operation of Ontario’s franchise legislation will result in Sunoco’s dealers, who built up the Sunoco brand through years of hard work and loyal service, receiving a return on their personal efforts and investments.”
