Superior Court of Quebec validates royalty clauses of Jean Coutu Group’s franchise agreements
VARENNES, QUEBEC–(Marketwired – Jan. 3, 2017) – The Jean Coutu Group (PJC) Inc. (TSX:PJC.A) (the “Company” or the “Jean Coutu Group”) announces that the Superior Court of Quebec handed down an important judgment on December 29, 2016, as part of a legal recourse between pharmacist- owner Michel Quesnel and the Jean Coutu Group.
In view of the questions raised by this dispute, the Ordre des pharmaciens du Québec was involved in the case.
In her decision, the Honourable Justice Michèle Monast rules that the royalty clauses in all the Jean Coutu Group’s franchise agreements are legal and these clauses are not in violation of, among others, section 49 of the Code of Ethics of pharmacists of Quebec which prohibits pharmacists from sharing profits from the sale of medications or from their fees with a non- pharmacist.
The judgment stipulates that the evidence delivered through experts before the Court demonstrates that Jean Coutu Group franchisees pay royalties corresponding to the fair value of the rights granted to them and the goods and services provided in return. These include support services and benefits obtained through the use of the Jean Coutu Group name and trademarks for the operation of their establishments.
“We are pleased with this ruling that will provide reassurance to the pharmacist-owners affiliated with our network as to their franchise agreements and regarding the value of the goods and services they receive” stated François J. Coutu, President and CEO of the Jean Coutu Group.
About The Jean Coutu Group
The Jean Coutu Group is one of the most trusted names in Canadian pharmacy retailing. The Corporation operates a network of 418 franchised stores located in the provinces of Québec, New Brunswick and Ontario under the banners of PJC Jean Coutu, PJC Clinique, PJC Santé and PJC Santé Beauté, which employs close to 20,000 people. Furthermore, the Jean Coutu Group owns Pro Doc Ltd (“Pro Doc”), a Québec-based subsidiary and manufacturer of generic drugs.
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