Tim Hortons STL Closes Two Restaurants and Files Multi-Million Dollar Lawsuit

Tim Hortons soup, sandwich and coffee

ST LOUIS, Missouri – Show Me Hospitality LLC, the area developer for Tim Hortons in the
Greater St. Louis area has closed two restaurants located at 231 North Tucker Boulevard in
downtown St. Louis and 4249 Clayton Avenue in the Cortex District. The closings are directly
related to the failure of Show Me Hospitality’s franchisor, Tim Hortons USA, Inc., to meet its
obligations in its agreements with Show Me Hospitality. Tim Hortons breach of its contractual
obligations to Show Me Hospitality is the basis of a lawsuit Show Me Hospitality filed against
Tim Hortons.

The lawsuit asserts that shortly after Brazilian-based 3G Capital, through newly formed
Restaurant Brands International (RBI), acquired Tim Hortons in December 2014 it began
demanding Show Me Hospitality increase its obligations to develop Tim Hortons restaurants in
the St. Louis area from 40 restaurants over five years to more than 200 restaurants over 10

The suit alleges that when Show Me Hospitality rejected the demand by the new owners and
asked that the new owners simply honor the agreements Show Me Hospitality signed with the
original ownership group in May 2014, Tim Hortons new owners stopped approving locations
submitted by Show Me Hospitality, failed to provide branding and advertising during the critical
time when Show Me Hospitality was entering the St. Louis market, withheld approval of new
partners and necessary capital investment, and stated that if Show Me Hospitality did not
commit to the 200 restaurant program, Tim Hortons would terminate the area development

Eric Sigurdson, President of Show Me Hospitality said, “It saddens us to close restaurants. The
agreement we signed with the original ownership group was fueled by a deep passion for the
Tim Hortons brand. Our franchisor’s repudiation of its obligations under the original agreement
derailed our business plan and scared off great new partners, leading us to have to evaluate our
operations and locations, both now and in the near future.”

Sigurdson continued, “Over the past several months we have been working with other restaurant
groups on the sale of locations, but Tim Hortons threatened the transactions. In these challenging
circumstances, there is nothing we regret more than not being able to meet obligations to our
creditors, professionals, and partners that have so loyally supported us.”

After repeated attempts to resolve issues with Tim Hortons during 2016 and first half of 2017,
Show Me Hospitality filed suit in the US District Court for the Southern District of Florida in July.
“There are now numerous legal actions other franchisees have taken against RBI/Tim Hortons
both in the US and Canada, starting with the formation of strong and active franchisee
associations and two class action lawsuits seeking damages of approximately $1.5 billion. A
simple Internet search will uncover many public allegations and media articles regarding the
franchisor’s claimed mismanagement of the brand and the negative impact to franchisees,”
added Sigurdson.

Show Me Hospitality is seeking monetary damages in excess of $50 million to compensate for
the loss of a business opportunity projected to have been worth more than $125 million in 10
to 15 years. Scott Korzenowski and Andrew Malzahn of the Minneapolis-based law firm, Dady &
Gardner, P.A., are representing Show Me Hospitality.

According to Scott Korzenowski, lead counsel for the Plaintiff, “Show Me Hospitality is a team of
good, decent people who learned only after investing millions of dollars that the new owners
had no interest in honoring the original agreement for the St. Louis market. Tim Hortons
wanted my client to invest an additional $20 million and commit to developing more than 200
restaurants in 10 years, or a desired ratio of one restaurant per every 15,000 people in the
territory. To put this into perspective, McDonald’s has approximately 130 restaurants in the St.
Louis region, which it built over several decades.”

Show Me Hospitality will continue to serve St. Louis customers at their restaurants in Maplewood,
Lafayette, O’Fallon, IL and express cafe in Frontenac.

Please direct all inquiries regarding this lawsuit to Scott Korzenowski at Dady & Gardner. Based
in Minneapolis, Minnesota, Dady & Gardner, P.A., limits its practice to helping franchisees and
dealers preserve and enhance the value of their businesses as effectively and as efficiently as
possible. Dady & Gardner’s franchise attorneys have represented a wide array of clients, from
quick-service restaurant franchisees to farm and industrial equipment dealers, and have
successfully resolved disputes against more than 350 different franchise and supply systems.
For more information on Dady & Gardner, please visit http://www.dadygardner.com.