Superior Court of Quebec rules in favor of Jean Coutu Group on franchise agreements

VARENNES, Quebec — The Superior Court of Quebec ruled in favor of the Jean Coutu Group late December, the Canadian retailer announced Tuesday, ruling that the company's franchise agreements with pharmacist owners are not in violation of 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 nonpharmacist.



“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 Coutu, president and CEO of the Jean Coutu Group.



In her decision, the Honourable Justice Michèle Monast ruled that the royalty clauses in all the Jean Coutu Group’s franchise agreements are legal. The judgment stipulated that the evidence delivered through experts before the Court demonstrated 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.