TORONTO, November 5, 2013 /CNW/ – The Ontario Superior Court of Justice has upheld a class action against Shoppers Drug Mart on behalf of former and current Associate Franchisees of Shoppers Drug Mart across Canada, with the exception of Quebec. Shoppers Drug Mart Corp., which is plagued by cost-effective drug reforms, says it has been hit by a $1 billion complaint from two of its drug owners who accuse of breach of contract. Under the contingency tax agreement, the class advisor must pay a contingency tax equal to 33 1/3 per cent of the amount recovered in the group action, but that still depends on the court`s agreement before he can be acquitted. Creating a job alert for homeowners associated with Toronto-basierte Drug Mart Shopper moved quickly last summer to review its business strategy after Ontario passed generic drug reforms that put pharmacies online. The amendments were estimated at $750 million per year in occupational benefits paid by generic drug manufacturers to pharmacies in exchange for shelves. Chains such as shoppers relied on these fees to increase their profits. Shoppers Drug Mart operates a large franchise pharmacy system across Canada. Each of these transactions is independent and managed by franchisees (called „associates“). Employees are required to enter into franchise agreements with Shoppers Drug Mart (the „Association Agreement“) in standard form.
The lawsuit is filed on behalf of partners across Canada, with the exception of Quebec. Minimium investment to own a Drug Franchise Shopper-Mart or Pharmasave? „Whenever you have a significant change in business model, it`s common for people to go back and start looking at their agreements and where maybe try to change things in their favor,“ he said. The class lawyers („class counsel“) entered into a contingency fee agreement with the representative applicants. The class counselor is not paid for his work unless the group action is concluded either by a judgment against the buyer or by the conclusion of a relationship with the purchasers, which has been approved by the court. In the class action, the applicants argue that Shoppers Drug Mart violated its franchise agreements by the manner in which it applied its inventory practices and by the collection of excessive collection fees for the services it provided and for contracts and leases relating to the activities of class members. The applicants are seeking compensation on behalf of the class for these alleged offences. The need for new initiatives emerged in the third quarter of buyers, the first to feel the pressure of drug reforms in Ontario. Earnings fell 6.7 percent to $159 million, while revenue rose 2.6 percent to $3.09 billion. This is supported financially by the Ontario Class Proceedings Fund.